PETER THIEL
EPISODE 47
We wrap our Investor series with a Silicon Valley heavyweight - Peter Thiel. Peter started his entrepreneurial adventure with PayPal and continued his success with Palantir and Founders Fund.
He made one of the best investments in history by being the first investor in Facebook. His book Zero to One and his political activity have catapulted him into the public arena.
SHOW CLIPS
A BLOCK
ADVICE
Being Different And How It Matters
Do One Thing Better Than Anyone Else - startup advice
Monopoly is how to do well in business
LEARN
Thoughts on MBA grads And The Herd
U.S. College System as Corrupt as Church 500 Years Ago
BOOK:
Zero to One: Notes on Startups, or How to Build the Future
Conspiracy: A True Story of Power, Sex, and a Billionaire's Secret Plot to Destroy a Media Empire
B BLOCK
Economics
Keynesian Economics Will Be Dead
TRENDS
Amazon And Becoming The Most Profitable Company In History
Bitcoin And Undervalued Opportunities
Peter Thiel Explains Trump Support
TRANSCRIPT
Hello and welcome to the moonshots podcast. It's episode 47. I'm your cohost Mike Parsons. And as always, I'm joined by the man from Brooklyn, mr. Chad Owen. Hello, Chad. Hey, Mike, we've come to the sad, sad end of our investors and series here. I know, I know. And boy are these guys thinkers? Huh? I mean each and everyone.
So far Warren buffet, Ray Dalio, Paul Graham, they've all got such a strong point of view on how business and innovation, how, how the world of business really works. Don't they. Yeah, it's been really interesting to see and search for their members, so models and how they view the world. Obviously, as investors, you know, they have their algorithms or mental models that they use to make those investments.
So it's been really interesting to discover and pick them apart. They've been rather similar, don't you think to the authors and I guess this comes with their respective trades, but the author series and the investor series have been some of the clearest thinkers we've ever had on the show. You talked about those mental models.
Those philosophies and radar, those cases, principals, they've all got such a sharp, clear point of view on how things work. And I think that's one of the biggest learnings isn't it? That we can take from both authors and investors is having this clarity of thought. That they're all lifelong learners. And it's really inspiring for me because I've been taking out of this.
Like I have to have a clear point of view and I tell you, there is no one better than the subject of this show to provoke thinking and reframing, perhaps some assumptions that we have. Yeah. So we're going to be hearing from Peter teal. Part of the so-called PayPal mafia and yeah, he's got some very interesting counter-intuitive I think like many of these investors, countervailing, counterintuitive opinions, so yeah.
I'm really excited to hear what he has to say. Yeah, let's talk. What about a couple of reasons why pay detail matters? I think you mentioned obviously he was right there next to Ilan in the founding of PayPal. He also has been involved in creating many other really profound watershed companies plant here, founders fund, both respectively rural leaders in their area.
If you haven't heard of him, you might've seen him in a movie. He was portrayed in the social network because he was the first investor in Facebook. His list of participations in terms of his investments outside of. Facebook and space X and plan tear, a little music app called Spotify and maybe a place.
A lot of our listeners have used Chad Airbnb. So he's picked. Enough winners, certainly for a lifetime. And I think he's right up there with Paul Graham. Don't you think chat in terms of Silicon Valley, powerhouses and investment? Yeah, like you said, he was the first investor in Facebook. And as soon as he joined the board of Facebook and Facebook was taking off, he started his VC fund.
The founders fund, as you said, is one of the leading Vanguard investors in many of today's fastest growing startups. He's also done some kind of contrarian things. So he lives in California. Yeah. But he's a very proud Republican probably makes him one out of the 20 odd million people that live in California.
He's done some other crazy stuff, Chad, like he's got his fellowship. Where he gives money to people to drop out of college and pursue their dreams. He was revealed to be the man investing, uh, into whole Cogans illegal case against Gorka. And just to top all of this off like a critical player in Silicon Valley last year said, you know what?
I'm over San Francisco and just moved to Los Angeles. So this is a mess and full of surprises, constrain, moves, and thoughts and ideas. We've got an absolute ripper of a show coming up because we're going to get into how he thinks about learning and education. What advice he's got for startups, how he thinks about economics and other companies it's jam packed.
And Chad, you will, uh, share some of your thoughts on one or two of these books, which I have also read. We have a lot to come in this show, don't we? Yeah. These first clips that we're going to be hearing from Peter on is I think really, you know, taken from his thinking that is also in his book zero to one in how and why you start a startup and really kind of what the aim of business is.
But one of the things he really. Talks about is clear differentiator in potentially even like cornering the market as a monopoly. But this first clip is really just about being different and why it matters. You know, there's a strange phenomenon in Silicon Valley where many of the people who've been successful entrepreneurs, uh, seem to be suffering from a mild form of Asperger's or something like that.
They seem to be, um, socially a little bit maladapted and in one way or another. And, and I think we need to always take this fact and turn it around into a critique of art, whole society. We need to ask the question. Why is anybody who's normal? Anybody who's not suffering from Asperger's at a disadvantage where your original ideas, your interesting thoughts you'll be talked out of.
Exploring them before they're even fully formed, because you will pick up on all these social cues from people around you and it will be, Oh, that's a little bit too strange. That's too weird. Now you probably shouldn't do that. Probably just a safest to go back and open that restaurant like everybody else.
And I think this is something that's very, that's very deep in human nature. You know, the, uh, you know, already in the time of Shakespeare, um, the word ape. Meant both primate and to imitate. And there's something about human nature. Imitation is, is, is a very deep aspect of what we do. It's how we learn languages, children by copying our parents.
It's how culture is transmitted in our society. But it also leads to many forms of insane behavior leads to crazy peer pressures. When we're young, it leads to the madness of crowds. It leads to, you know, ape like sheep, like lemming, like herd, like behavior. It leads to market bubbles and all sorts of all sorts of forms of insanity.
I've often thought that if you, that the antiacid burger group, if you say, what are people who are, um, the anti Asperger's? I think those are like businesses, school students, where these are people who are super extroverted, they're socially very well adapted. Um, they have very few convictions typically, so they're a little bit low on the conviction side.
In the U S when you have an MBA program, you take all these people and you put them in the same place for two years, and they talk to one another for two years to try to figure out what they're going to do next, which is kind of a difficult thing, says nobody has any idea what to do next, since they're all there, because they don't know what to do next.
And then they've done these studies at Harvard business school, where they found that the largest cohort from every class does the precisely wrong thing. It's like, they're all trying to catch the last wave. You know, in 1989, the largest group wanted to work for Michael Milken who was involved in all the junk bonds in the eighties is that one or two years later, he went to jail and.
No, they were never interested in technology except for 99, 2000, when they descended on Silicon Valley, just as the.com bubble was about to come to an end. And so it's sort of the systematic, uh, a bias to do all the, all the, the wrong things. Um, and it's easy to make fun of business schools, students. I think we have to realize that we're all subjects, these pressures to a tremendous degree.
Uh, you know, when we look at advertising on television, um, people often think to themselves, Look at that stupid ad who are the dumb people who fall for that. And the very disturbing truth is that it is all of us. We're all incredibly prone to, uh, to these kinds of things were incredibly subject to this.
Yeah, I hear this chat and you know, my mind race straight to Steve jobs and Apple's campaign of think different. I mean, I think what Peter teal is doing for us here is challenging us to be different and not to follow the herd. I found this thinking like exciting, but a little bit uncomfortable because you kind of realize that.
We all do conform and that never produces something special. Conformity. It always produces the standard, the average, the median. Yeah. The part at the beginning where he almost describes having Asperger's is like, A bit of defense or armor against those pressures. And now why don't we, the quote, normal people, not so much credence to, or be so affected by all the social pressures and the peer pressure.
It's a really intense, interesting idea, but I think what he's getting to is like, The heart of the character of what he sees is true entrepreneurs. And I think that's why he's very hesitant to call MBA students, entrepreneurs, or, you know, people with MBAs entrepreneurs rightly or wrongly. But it's a very interesting perspective.
The challenge, I think he puts to us here is to think differently. And what we can learn from this is if you really want to create a very successful new product or service. You have to actually approach a big problem in a totally different way from which others have done. So you actually have to put on your Asperger's hat, be a little bit non-conformist and really have the capacity to think differently.
And I think this is the thing we can take out of this, just solving problems, the same way as everyone else is doing this act of conformity will never yield something special. And this takes us right into this next thought from Peter teal, which is. When it comes down to it, the heart of your success in your new business, your new product or service in your startup is really doing one thing remarkably better than anyone else.
So let's have a listen to Peter tail talking about doing one thing better than the rest. The most critical thing for every startup is to be doing one thing uniquely well, better than anybody else in the world. Technology is fundamentally a global business. Um, and, uh, the Greeley great technology companies, um, are doing something significantly better than anybody else in the world.
Um, and you, you want to be. And that sort of a position. I think if you're just starting a business, one of the questions that's always valuable to answer is what do you know? That's true that nobody else understands or, um, or more prosaically, uh, what, uh, what great business exists that nobody is building I'm of the view that we are not living in a time of, uh, tremendous technological acceleration.
I think we've had. Uh, 40 years of, um, uh, what does it best modest growth. There has been progress in computers and finance in the world of bits, but not in the world of stuff. If you look at transportation, if you look at energy, uh, biotechnology, uh, And you have a number of other areas of technology. Uh, things have basically been stagnant at best for the last 40 years.
This is reflected in the way in which, um, uh, wages have not really gone up in the U S or the rest of the developed world since the early 1970s. Um, and I think we need to think really hard, uh, why technological progress has been as, um, as badly stalled as it has. Um, I'm not a fatalistic about this. I think that, uh, I think that we could be doing a lot better.
Um, I think that, uh, I think that sort of an optimistic complacency is the thing we must constantly resist. Uh, and we, uh, we must sort of, I have a slightly pessimistic, but very non complacent attitude, not defeatist, but just a view that we could be doing so much better. I think a technological innovation involves maybe three separate things.
There's sort of a brilliant breakthrough idea. There's incremental improvement and there's complex coordination. Uh, we're pretty good at the incremental improvement part. We're pretty bad on the other two. And we probably need to think really hard about the other two. You probably need brilliant breakthroughs in areas like biotechnology to really take it to the next level.
And we probably have a academic and university system, which rewards incremental research and doesn't reward. The brilliant scientist is working for 10 years on a single great project that such a person would never get tenure or even a PhD. Um, and on the complex coordination side, uh, there are a lot of things that require complex coordination.
So for example, if we're to develop next generation nuclear power technology in the U S you need to figure out ways to store the waste. You need to figure out ways to cite the, the, uh, the plants. Um, you need to figure out all sorts of complicated ways to coordinate it with the rest of the energy system.
And that's, again, something that we're. Extremely bad at doing. And so I think that we need to figure out ways to do better coordination and, uh, and encourage, um, sort of, uh, uh, brilliant scientists and technologists to be able to, um, have a sustained runway to pursue to their dreams. Whoa. Yeah. I love his use of alliteration, the history, things of brilliant breakthroughs.
Incremental improvements and complex coordination. I definitely agree with him that the brilliant breakthroughs are lacking in that there's actually some perverse incentive structures. I think in a backhanded way, he's kind of advocating for, you know, the VC model of funding, where I believe that this idea's going to be great.
And I'm okay with this company and not being profitable for five years because. I know that they're going to have a breakthrough and then that's why he might invest so much money, but it's quite risky and not all of those bets pan out, but you know, that's, his business model is a VC, you know, he's, he's banking on just a couple of those bets paying off.
Yeah. The thing that he did there is he gave us such good advice in not only where we can find opportunity as you pointed out, right. Ending up on that complex coordination. I think he gave us a very simple truth, which is do one thing better than anybody else. And. I honestly think that that is so hard to truly achieve.
And how many times Chad have you and I talked about discussed, observed companies, startups, products, or services that really don't do one thing better than anybody else. And two. Peter Till's earlier thought they're just part of the herd. It's just another thing yielding the same, the results. I think this is a huge learning, like ask yourself day one, day a hundred.
Are we doing one thing better than. Anybody else. Yeah, we can't succumb to shiny objects syndrome or SOS as I call it. It's kind of baked into the entrepreneurial spirit, you know, to see opportunities everywhere, but you have to have the discipline to pick one and just focus on that. That again is what I'm taking away is yeah.
Have the discipline to choose the one thing and stake your work and your reputation on that and make, make that your brilliant breakthrough. Yeah. So, I mean a big check. How are you really doing one thing better than anybody else? Now what's fascinating is basically what we're proposing here from Peter till is what he's worked out as if you think different.
And then do one thing better than anybody else. The next thing that happens is really where the economic value lies. Now what's interesting in this next idea is that we've always thought as monopoly. In terms of business, a market of one is a really bad thing. In fact, Peter, till turns this on its head and says, no, no, no, no.
It's all about creating a monopoly or a market of one. So let's have a listen to Peter teal telling us how monopoly works. So at the risk of, of boiling down your, your, you know, your, your mid careers worth of experiences, what are the secrets of doing something that's truly transformational? Uh, There are, there are probably many other, probably many different things to focus on, but, uh, but one that I, I, uh, particular stress on is the idea of doing something that's valuable.
And that other people are not doing. And so I, um, there's an intellectual version of this question. Tell me something that's true that very few people agree with you on. And then there's a business version of this, uh, what great business is, is nobody building. And, uh, and so, uh, if, if you're building, um, uh, a great business that lots of other people are building much trickier proposition, you know, the 20th, um, online pet food company, the 12th.
Panel solar P uh, company, um, probably tricky, very competitive. It's like opening up a run. San Francisco terrible business idea. But if you're building something that hasn't quite been done, Um, and has this unique aspect, you have a chance to, uh, to create a monopoly, which is how, how one really does well in business.
So to be clear, you would steer away from something that very well may be a good business idea and may be a decent money maker big for this reason. Uh, I tend to think, um, these things are linked. So I think if you have. Um, many businesses in an area they will compete with each other and they will compete away the profits.
If you have an area where, um, there's a, one of a kind business that, uh, that dominates it, um, it will tend to be a, um, a unique and very valuable business. And so do you, you want to break that cycle as an investor and as an entrepreneur? Is that one of your goals or are you more trying to observe the phenomenon?
Well, I'm, I'm trying to, um, it's a sort of, the modest goal is just to, um, I'll explain what I've learned in the last 15, 20 years. And, uh, and so there are certainly, um, certainly the, the, the place I, I would like to do. I think we need to do more technologies in society. I'm, I've, uh, I've often articulated the view that we're living in society, where we have a lot of innovation in the world of bits and computers, not so much in the world of atoms, um, and, um, you know, other other technologies and that it would be good for us to have, uh, more innovation in our society.
And I worry that, um, the rewards for innovation have not been, um, um, great enough in areas outside of. Outside of computer technology. So it is definitely something that I, I keep looking at to see if one can, one can try to do things in transportation and biotech and energy, all these different areas. And the most interesting thing aside from, you know, monopolies is the way to go this idea that there's not enough incentive lives outside of, you know, software and Silicon Valley to really have those breakthrough innovations, not really something I've maybe thought about, but you know, him calling out, like I can see that.
Yeah. And that goes to that earlier point here I'm by no means an expert in academia, but he was making this point earlier that. No professor or scientist at a university would receive tenure if they devoted just 10 years to solving one problem. Now let's just say that that was true. What's really ironic about that is that you and I have discovered that all of the successful men and women that we've studied have.
Essentially spent 10 years working on this problem in some way, shape or form. I'm not always at full steam, but certainly it's been on their mind. Maybe it's been a hobby, maybe they've touched on it. So the great irony that he's pointing out is exactly what you need is absolute obsession over a long period of time.
Which is the key to entrepreneurial success. He's basically saying, and not for the first time critiquing the world of academics and learning and saying that the incentive is not there to do so. So I found that very, very strong, but Chad, I love this idea of create a monopoly, just be in a market of wine, and we're going to get to his book a bit later.
It's a big theme that was in the book, but I found this. So refreshing. When I read the book for the first time, I was like, Oh yeah, don't just do something a bit better than the others. Like, this is all about you are remarkable. You're a standalone. You're in a market of one. Isn't that powerful. Yeah. But I don't know how you can maintain that monopoly.
So I suffer startup fatigue. You know, in New York city, I kid you not every month, there is a new direct to consumer mattress company advertising on the New York subway. And how many direct to consumer mattress companies do we actually need? I don't know if Casper was the first, but they were certainly the first that had the biggest marketing push.
So if Casper took Peter's advice and it was like, I'm sure they were trying to act as a monopoly, but. All of a sudden, you know, there's a dozen more entrance, I guess what, I'm struggling to understand it. I know that he addresses this in his book, but it's like, how do you maintain your monopoly status?
Because many times it's had to been through like government controls and regulations or deregulations. I mean, it's a fascinating economic kind of theory, but there have been very few companies that have been able, I think, to maintain their monopoly status. I think in many ways, it's perhaps even the idea itself, particularly when you start carves out, I mean, look at Google, you know, market of why there are great examples and you know, the great challenge with the network effect of Google and pivotal is big on network effects as well.
But it becomes really hard for anyone to challenge Google because the product just gets better. The more people that use it. So entering up in a competition with Google is really hard because your product is sort of dependent upon high volumes of usage. And that's hard to get when you're breaking into a new market.
So yeah, fascinating stuff. So we know we've got to think different. We know we've got to do one thing better than anybody else. And hope to create this market of one. And that's just the story part of what we can learn from Peter till now. What's important to note for our listeners is, you know, a lot of details, book zero to one, we'll have links to that.
All the clips and everything over at moonshots. Dot IO, where you can find out about this show in the show notes or alternatively, the whole entire archive of Chad and I discovering all these new insights is all online at dot IO. So be sure to check that out, but Chad, if you hadn't worked it out, I don't think Peter till was terribly in love with the world of college and universities.
What do you reckon now? Yeah, we've got two really great clips on that. This first one where he's really equating MBA grads and the herd, since you feel an MBA is a bad investment for a student. And what do you feel is a better path to management and career success? I mean, based on your answer, they may drop out of BU and then be used, going to be mad at me and.
Mad at you, but you live further away. Well, look at my, I'm always, I'm always skeptical Cole of giving absolutely sweeping pronouncement. So there's, um, you know, saying that an MBA is, you know, bad for everybody is, is incorrect. The, uh, the, the, um, you know, the. In terms of the entrepreneur, uh, technology context.
Uh, I do think that the, the general profile of an MBA student is sort of the anti Asperger's. You know, they're very, very extroverted. Um, you often have people with somewhat low conviction. Um, you have sort of this hot house environment where they spend two years with other people just like themselves.
And, um, and at the end of the two years, uh, people often end up. Uh, deciding collectively to all try to catch the last wave. And so they've done these studies on, uh, business schools where people systematically tend to go into the fields that are just about the wrong ones. And so that's, so there is something about the, um, the, uh, The, the approach that I think leads to this sort of heard, like, uh, thinking that's, that's always, that's always problematic.
It's not necessary it's but it's something that's. I think that if you are in an MBA program, uh, you would do well to be extremely aware of and to try to try to very powerful. And is your advice about, you know, what to do is, is just to kind of be out there getting experience building companies? Yeah.
Let's I would see what I, what I. Don't like about now, if I had to say what I don't like about an MBA is that, um, is the conceit is that business is a process that there's, that it's about management. There's this thing called management that works equally well everywhere, whether you're running, um, you know, a chemical engineering company.
Or whether you're running a software company or whether you're running a restaurant or a rocket company. Um, and, um, and it puts too much of the stress on process. And, uh, and what always does matter a lot is having, uh, sort of having substance or being actually genuinely passionate about some very specific, uh, vertical, uh, thing.
And, and, and the, you know, the, the vibe one gets from many people in MBA programs is that they sort of these lost souls who have no idea what they want to do with their lives. Ciao. Ciao. He's really swinging for it. Look, whether you agree with him or not. I just love that so many times, whether it's supporting Donald Trump going after Gorka challenging the status quo, we've just got somebody here who.
Really does think things through and is not scared to share his thoughts. And, you know, we live in a world where it's harder to have the right conversations. I love the fact that he's sort of fearless here in challenging. What, as particularly in America, Chad, that the path to working to a career is considered to be go to college.
Grab an MBA like that really is a defacto standard. And he's calling this out really is it does not translate into entrepreneurial-ism at all. It's almost the antithesis. Yeah. He talks about process of business management that you learn in most MBA programs and he sees. The penicillin, like application of that everywhere as part of the problem, he certainly says like there's some uses for some MBAs in some places, but I think he's critiquing the aimless directionless herds of young people that don't know what to do with their lives.
You know, he's saying that, you know, getting an MBA is not really the answer and that your attention again is probably better spent in picking one thing, really diving deep and focusing on that and having a conviction. He's used that word a couple of times and isn't it interesting. So for someone who's obviously super smart, very quantative.
Very much into economics and models and so forth. What he's revealing here is he's basically saying you've really gotta be passionate about the problem, which you're solving. That that's a huge part of where success comes from. And how much does that align to some of the other people that were studied?
Chad, practically, everyone. I would say price. Tim O'Reilly comes to mind where he in his admission to do things that matter that you care about. I don't think there's anyone that we've profiled that doesn't share that same idea. It's such a big aha. And it's so funny that we're talking about, you've got to care about the stuff that you're working on and that's why he created his feel fellowship.
As an antidote to these problems, but just when you thought Chad, he couldn't possibly double down and like twist the knife in the back of the U S college system. I think we're going to find that Peter teal is prepared to take this thinking to the extreme. So buckle in, get ready because this next clip is painted till drawing some pretty powerful comparisons between the college system.
And so let's dig in and have a listen to Peter too. I've never said that there's a one size fits all approach. And, uh, you know, people have characterized mischaracterize. My view is that everyone should drop out of college. Everyone should start a company. I don't think everybody should be starting companies.
Um, you know, just given this power law thing, I think a lot of companies don't work. Uh, we need more people to start good companies. Um, but, uh, but I think also. The sort of super tract dynamics have, um, have gotten us to a very bad place where, um, where education has become a substitute for thinking about the future, you know?
Um, and yeah, K through 12 system is geared towards college knowledge. Um, and the problem is life doesn't end it college, you know, it, it, you know, hopefully you live for a long time after that and do many, many things after college and, um, And, um, and there's a strange way where we live in a society where there's a lot of anxiety about the future.
Um, and we've put more and more money into education for the last 35 years, as a way of dealing with this anxiety, where if you get into the right college, you know, you'll be saved. If you don't, you're in trouble, I've sort of described, uh, the college sort of dramatic version I've said is, you know, colleges, they're like they're as corrupt as the Catholic church was 500 years ago.
Uh, they're sort of charging people more and more the system of indulgences. You have this priestly or professor Oriel class that doesn't do very much work. And then, um, and then you basically tell people that if you get a diploma you're saved, you know, otherwise you go to hell, you know, you go to Yale or you go to jail.
That's sort of the, that's sort of, um, and, and what I think we need to, we need to push back. Um, on this, um, on this, that, this, this idea that the only way you get saved is, you know, Catholic church 500 years ago, or today, the only way to get saved is by, uh, by getting a diploma from college. And I hope, I hope that in the future, there will be, um, many different kinds of productive things for people to do.
My goal with the teal fellowship was not to start a new church, the startup church, or something like that. It's not to have this alternate one size fits all thing. But I think the, the future system will be one that's a much more heterogeneous and where there will be many more ways for people to be success.
Maybe your flying cars will save us all. I love his line of education has replaced thinking about the future. That kind of stopped me in my tracks. Oh, that hurts. Oh, this kind of elaborates a conviction of mine that I think it's very important that we ask what education is for today. It's not my own idea.
It's something I picked up from Seth Goden. If you search for stop stealing dreams, a Seth goat, and he has this amazing talk where he asks that question and kind of talks through that. But I think Peter's taking that idea one step further and not just saying we need to do something different in education.
He's saying the fundamental premise of education needs to be reexamined. Like let's go back to first principles on education and understand why we're doing it. And for some people. That track, the traditional track may be for them. But again, he's so good at taking it very outside, kind of almost foreign or alien perspective on things that, yeah, I think that's really what's coming through to me and listening to all of these clips is that that may actually be what we can learn most from Peter.
Is that ability to take this. Alien perspective on things because it can just help us see the situation more clearly. Absolutely. I think the big takeout from his advice for us in terms of starting something or how we should think about learning and education, I think there's two parts to it. I think you're quite right.
He's contrarian, but I think he's also brave. We've seen that not only in his ability to share radical thoughts, but he stood up at the Republican convention several years ago and said, Hey, I'm gay, which at the time was sort of breaking some boundaries, some ceilings that had existed before. So he is really.
In this respect, not only can share him, but he's prepared to share them. He has the courage to share his thinking. And I think we're better for it. Whether you agree with him or not, I don't care. I think we're better for it, that people are putting ideas out in the world. And they're prepared to kind of stand by them.
And it reminds me a little bit of Jordan Peterson. Teal has the ability to present ideas that run contrary to those of others and is prepared to have a discussion about them. And Jordan Peterson has this great book called 12 rules for life, but we're going to talk about two books that circle around Peter, till should we start with, with Peter's first one.
Chad, do you want to talk about that or do you want to go for conspiracy by Ryan holiday? Yeah, we'll go with the zero to one first. Okay. So zero to one. It's pretty much, I think my big takeout, Chad was, it's all about this thought. That's already come up on the shows, build a monopoly, create something that is a one of a kind.
And I think, you know, yes, he talks about be bold, have a plan, differentiate don't even be in the same market. He's got lots of thoughts. It's there, but I think above and beyond anything else, it's like create a monopoly, look to create something that it's that question that he asks. What's one great company that nobody's building.
Yeah. It makes a lot of sense. The thing that was kind of lacking for me in the book was. Me brought up the example of Google as the monopoly, how do we create things that are novel? And he talks about things like hiring, right. And, you know, having some kind of proprietary technology or like the built in network effects that you're talking about.
The big takeaway for me was like, that is not an easy thing to do to build a monopoly. Oh, absolutely. You know, and that's why this formula that you and I have discovered across all the entrepreneurs and innovators. Courage relentless, be a learner to be unflexible on your vision, but very flexible on how you get there.
There are so many of these truths and the iceberg idea that success is not an overnight thing. You know, it takes you years and years and years. We've learned all of those things. Yeah, I did enjoy the brevity of the book. It's quite easy to read and I think his arguments are very well. Laid out again. It was like a little harder for me to understand.
He knows a business owner. Okay. Like how do I start to do or implement some of these things? But I think for me, it pushes me into more specialized positioning of my work and the types of clients that I take on. Because, I mean, at the end of the day, if you can be the owner only potential choice for a client or a customer, like, I think that's really what he's talking about when he says still a monopoly.
I still think Apple has a monopoly in the smartphone space, just because as cool as Android is, in some instances, like it's not the Apple iPhone iOS experience. And so it's like, if you want a beautifully designed piece of hardware with the software to match. You've got to go to Apple for it. Yes. Well, the really neat thing in terms of this is we actually will hear Peter talking a little bit about Amazon and he's thoughts on that as a market of one.
So we're going to come back and. Look at that idea from a different way, but it has to be said for all of the price that we're giving Peter for his thinking and his courage. He's been at the heart of a very controversial scandal where he supported whole Cogan in a case against Gorka media. And you actually read the book about that.
So tell us about the book and what your thoughts are. Chad. Is an interesting read written by Ryan holiday, who listeners may know from writing books. Like the obstacle is the way and ego is the enemy books on kind of modern stoicism philosophy. He's written other books like growth, hacker marketing, and many others, but this was an interesting kind of.
Investigative journalism. He kind of stumbled into a professional interviewer relationship with people in, in and around Peter teal. And I don't want to say stumbled into this story, but was given unique access to the story. So it kind of plays out a bit like a thriller that there's like some unnamed characters in the book, you know, different lawyers.
So. Peter tail didn't give money directly to whole Cogan, but Peter teal certainly supported legal efforts that were supporting whole Cogans lawsuit against Gawker for releasing a sex tape of his and Gawker had been writing very arguably libelous and slanderous things about Peter teal and many other people in Silicon Valley.
The kind of muckraking sensationalist type of journalism, but it turned out that Peter wanted to take a firm stance against that kind of journalism. For me, it was very interesting because it brought up a lot of issues around the first amendment, which here in the States is about free speech and power.
How much power should an individual be able to have in these kinds of very fundamental issues around journalistic freedoms and freedom of speech. Beach, et cetera. And it's written very well. It's got a great narrative. Like I said, there's secret characters. You know, that you don't even know who they are that are acting behind the scenes and at different points.
There's very interesting kind of anecdotes from, in person interviews that Ryan does with Peter as Peter is kind of telling his side of the story. So I found it very interesting. Yeah, it was just kind of, I guess, unexpected to see a character like Peter Tio in a book like that. I wouldn't be surprised if they turned it into a movie.
Well, there's the documentary, obviously on Netflix. I mean like a fiction here. Yeah. This is social network. Episode two, right? Yeah, exactly. I have to say that. The reviews of this book, although I haven't read it, the reviews are great. Read lots of Ryan holiday's books. Great books definitely dig into it.
So two books, not just when two books for our listeners today, that expose totally different sides of Peter tail. And boy, we've already seen some of this advice and he's thinking on learning that he's had for us so far. Awesome stuff, but it sets us up really great observations. He has really about the way in which the world works.
So coming up where he's going to give us his thoughts on Trump, thoughts on Bitcoin and Amazon, but where we want to start is getting a little bit into macro economics, Headspace and market movements. Now this next clip, this has some pretty serious economic commentary coming, but I think what's really important.
Is, it shows you the degree to which Peter can think and how we can learn from him. So he can talk about startups. He can make observations on the U S college system. And here he's going to talk about economics and for anyone that's in business, it's not just about startups, growth hacking and all that kind of stuff, or building a great product.
It's a sort of understanding the larger system in which we work this modern capitalistic system. And there are some many great. Economists within that. So let's have a look at what Peter till has to say about economics and in specific Keynesian economics, which really governs the world we live in today.
My favorite, uh, my favorite thinker, uh, remains a French philosopher named Rene Girard. He, uh, developed a, an account of human nature in which, uh, one thinks very hard about the question of imitation and the role. It, uh, it plays in, in the ways in which culture and societies form, uh, according to Gerard, uh, The word ape or means both primate and to imitate.
And there's something about human nature in which, uh, imitation plays an essential role. It can lead to many good things, so it can lead to, uh, education progress and sort of this way in which human society compounds on itself. Um, it can also lead to bad things and sort of crazy. Runaway feedback loops of violence and military escalation and conflict.
And I think one of the challenges in the 21st century is going to be to, um, to figure out a way for, uh, for people to take, uh, what is best in humans and make it better. And, uh, and, uh, and try to, uh, try to figure out ways to, uh, to address some of these, uh, these bad impulses before they spiral out of control and destroy the whole world.
My favorite economists are, um, you know, are probably the, the classic, uh, the sort of the classical economists still Hayak fund me says, uh, I knew Milton Friedman, so that's probably the one I'm, I'm sort of personally the most, almost biased towards, but I think, I think we are going to see a. Some sort of a return to the classic economic thinking of the 19th and 20th centuries.
My, uh, my villain in economics is more clear. I believe the villain, um, is his canes. And, um, you know, there was the canes line that in the long run, we're all dead. Whether or not that is true. I believe that in the long run, Keynesianism will be dead. And that the problem with. Never thinking about the long run is that in the short run, in the long run, the short run becomes the long run.
And I wonder whether the crisis of 2008, 2009, it was not just a crisis about finance or about technology, but also a crisis about. Um, short run thinking. And it was the point in time where short run thinking had run out. And there was no more time to think about the short term and that actually a lot of longterm problems we've been putting off and deferring had finally come home to roost.
It's always difficult to describe Genesis as a, as a, uh, In terms of, you know, it's always difficult to describe where one's ideas come from. And in various ways, I think I've always been somewhat of a classical liberal. I've always believed in limited government. Uh, I believe that power corrupts and absolute power corrupts apps and that, uh, and that one of the great challenges in our, um, Modern and technological age is to figure out ways to challenge the incredible power that human beings have been given in ways that are not corrupting.
Okay. I think we finally got the download from him there, who there was a lot in there. I think if you just step back, you can see how comprehensive the worldview from Peter till is from philosophers. Economists had two systems such as government and learning and education work down to how a startup needs to do something better than anybody else.
I mean, that's my first takeaway is this guy is well-read and well-thought right. Yeah. Yeah. He has very strong models for how the world works and, you know, he kinda named dropped that he knew Milton Friedman, but it's interesting his response to. What were the causes of the 2008, 2009 financial crisis.
Here's a guy that stopped. I heard some tech companies, you know, Stanford educated and he's a VC, but he's thinking like an economist and saying, well, there's these perverse for us to focus on the short term. And he blames it on canes, but the other side would argue. Friedmans cool to blame, but, you know, he sees, it was short term thinking that overtook longterm thinking.
It's fascinating to me to see him thinking like an economist. So I think what I'm taking away from this too, is like, how am I, I begin to think like an economist, even in a small way and how might that help me understand, you know, not only my business, but the market and the industry is really interesting.
Yeah. And obviously, definitely if you're listening to our show for the first time, go check out the Ray Dalio show of those of our listeners that haven't listened to that one yet. Yeah, because he's got some great thinking and explaining that he can give around how the economy works as well. So there's plenty there.
Chad. I'm so excited. I just want to jump straight into hearing about petty Till's thoughts on Amazon, because this theme that has come out of his writing is creating a market of one, a monopoly, if you will. And he obviously a bit of a trick question that was put to him, like, well, okay, is Amazon good or bad?
What do you think? And this really demonstrates him putting his sort of thinking into practice. So let's have a listen to Peter teal and his thoughts on Amazon. And I guess my question about the question is, is Amazon really monopolizing these industries? Are they choosing to compete in like the grocery business choosing to compete in now they're making their own branded consumer packaged goods like diapers?
Um, I would say maybe like AWS is the closest thing to Amazon saying we're going to stake out, um, you know, plant a flag in something that could be a monopoly type. Business will. Um, well certainly the, um, the, uh, the standard, um, you know, But there's all these paradoxes with when you think about antitrust type contexts.
But, uh, but, um, it's probably, Amazon's probably a difficult one to go after on antitrust grounds because their whole goal is to make things cheaper. Of course you need, this is always, you say, that's the plan, this monopolize, you make things cheaper than you wipe everybody out. And then you raise prices some point in the future.
Um, but I think, uh, I think probably the. The it's sort of like Walmart, they're going to get to a very big scale and you have these enormous economies of scale. Walmart has a certain type of monopoly as well. You know, what's your view of what does Amazon have a monopoly on today? Um, well, it's probably cheaper to buy books than in a bookstore.
So there probably are all of these kinds of things where they've gotten to these scale economies where it's, it's gotten somewhat cheaper. They, um, they don't, they don't all the, all the cheapness goes to the customers. They don't keep that much of it. And so they sort of keep reinvesting that in scaling.
And scaling the business. It's still a very open question at the end of the day, how much money they will make, but just like, um, like all these other companies we talked about, um, Amazon is very high. Valuation is, is linked to the belief that at some point in the future, they will be massively profitable.
Um, and it's, it's a little bit unclear whether that's the case by having that strong customer relationship, my credit card is on file with them. They help me logistical. Sobek there'll be so big. You just get to an end. You just keep getting to a bigger and bigger scale. And then at some point 10, 20 years in the future, you turn the dial and you'll be the most profitable company in the history of the world.
That's that's the theory. Yeah, it's really interesting to contrast this with Amazon and Apple's stock prices in 2018, you know, for a while, Amazon, I think it was like a day, maybe it was just a couple of hours. Amazon was the largest by market cap company in the world. Well, over a trillion dollars, if you look at the profit and loss statements or the balance sheets of Amazon versus Apple, Apple is throwing off billions of dollars in profits.
Whereas Amazon isn't. And it's interesting that that's what Peter's pointing to here is that Jeff Bezos, his first public share it letter to shareholders. He says it outright. We're going to be customer obsessed in pass on. All of our savings to the customer in forego profits today in order to be customer obsessed.
To me, that's an interesting path to the monopoly is that Jeff basis is playing the 20 year game or the 25 30 year game. So that 10 years from now, they might explode and they could be the monopoly in dozens, if not hundreds of different categories, I couldn't agree more. And I think if you look at today versus tomorrow, Oh, your money is on Amazon, just in light of just this recent, the deterioration in the strength of iPhone sales.
But you look at Apple and you think, yes, it can remain a healthy, very profitable organization. But when I really look at the future, everything has been incremental for them for many, many years now. And it's doing well and I'm not such a happy Apple customer, but when I think about. Owning the future.
There's only one company that I'm absolutely confident about and that's Amazon. And I think it's a great example though, because what Peter tilde points out is that the prices get lower for the customers, at least until this point. So he says it's very hard to get them on a monopolistic behavior because they're returning the value back to the customer, which I thought was a really powerful thought.
You have to prove harm to the consumer to go after a company for, for antitrust. And if Amazon is just trying to save the consumers money, it's hard to prove that the malicious antitrust activities or monopolistic activities. Absolutely. So I'm sure someone like Jack ma from Alibaba probably shares that more longterm thinking that Peter teal does, which I think.
Makes them very successful in their respective games, but we've got another talk of the moment meant item that the detail has some thoughts on, which is this whole cryptocurrency Bitcoin thing. So let's jump over now to his thoughts on the world of Bitcoin and finding undervalued opportunities. I'm always, I'm always nervous about the site being excited about things, because that always feels too irrationally, exuberant and too emotional and 1999.
So I went through 99. So a lot of people were very excited and that was, was, was dangerous. But, um, if you ask what are the things where there's, what's very charismatic, uh, and the people are not paying enough attention to, I think there are these pockets and biotech that I find like that. You know, the one other one that I've been looking at a lot more have been the cryptocurrencies and while I'm skeptical of most of them.
Yeah. I do think people are, are, um, are a little bit, uh, maybe, maybe underestimating Bitcoin specifically because it is like, it's like a reserve form of money. It's like gold and, um, and it's just a store of value you don't actually need to use to make payments. And it's been, you know, it's, there's about $70 billion worth of Bitcoin in the world.
There's 9 trillion worth of gold. And, and if Bitcoin ends up being the cyber equivalent of gold and it has a, it has a, it has a great potential left. So that's ends up. It's a very different kind of thing from what people in. So people in Silicon Valley normally focus on companies, not algorithms or protocols, but to this may be, this may be one exception.
That's. That's very underestimated. Well, people question it and I know there's been so much debate about Bitcoin, but they question it because what is it based on? I mean, you see that the dollar is based on, you know, the trust of the treasury, the trust of U S government. What is Bitcoin based on? Well, the argument it's based on the, on the security of the map, which tells you that it can never be, it can never be diluted by government.
It can never, it can never be, it can't be hacked and it's a form of money. That's absolutely secure in an absolute way. And of course you could ask the same question about gold. That's why I use the gold analogy. You say, what is gold based on what is gold valuable? Well, it's, it's a tangible asset though, tangible asset, but it's also hard to mind.
So if it was easy to mind goal than it wouldn't be that valuable because we would just have way more gold. So Bitcoin is also, um, it's, it's, Meinl like gold, it's hard to mine. It's, it's actually harder to mine than gold. And so in that sense, it's, it's more constrained. And so, yeah, there are a number of things that, uh, that, uh, that I think make it somewhat similar to gold.
And then the question is just, does this become, does this become more widely. And it's anonymous, right? I mean, that's one of the beauties of it. You can be anonymous using it. Yeah. It's it's half anonymous, half not. So it's, it's again, this intermediate thing is a question whether that's right or not, but it's, it's a bearer instrument.
So if you, if you have the Bitcoin, if you know the key, you can, you can go anywhere. Most of the time, most securities are registered, not bearer security. So it's a very unusual, kind of a security. So fascinating, right? Like he's just prepared our earlier guests, right? DeLeo totally destroyed Bitcoin. And that's why I love this clip because for our listeners, we owe you guys to play you different points of view.
So how cool is this? Chad? We've basically got two of our favorite guys. Totally disagreeing on Bitcoin. Well, I'm going to have to disagree with you, Mike, because I think they talk about Bitcoin in two different ways. Ray Daleo is looking at Bitcoin as an investment vehicle, and I think he sees the volatility in Bitcoin.
And Peter tends at this, the kind of Amania around Bitcoin. I think Peter sees it more long term as not a competition too, but the cyber version of gold Peter at no point ever mentions. It as an investment or investment strategy, he sees it more from like a utility point of view. I agree with both of them.
I agree with Ray and I agree with Peter here, but I'll probably diminish the importance of Bitcoin a little more than Peter. Yay. Okay. Very good then. That's great. That helps me to see that difference now. For our last clip, we've really pushed her right out there into the most contrary and points of view that Peter holds and, you know, look, we're not apologetic show, but we have got this last clip where Peter teal is leaning, how someone like himself can get behind Trump.
And I want everyone to listen to it on that level, but also understand. The kind of construct, he provides us here on how he makes such a decision and to also just enjoy a moment where someone is prepared to stand up for what they believe and what they think. And I think we can enjoy it on many levels.
So let's have a listen to Peter till explaining his reasons for supporting Donald Trump. I don't agree with everything Donald Trump has said and done. And I don't think the millions of other people voting for him do either. Nobody thinks his comments about women were acceptable. I agree. They were clearly offensive and inappropriate, but I don't think the voters pull the lever in order to endorse a candidates flaws.
It's not a lack of judgment that leads Americans to vote for Trump. We're voting for Trump because we judge the leadership of our country to have failed. Now that someone different is in the running. Someone who rejects the false reassuring stories that tell us everything is fine. His larger than life persona attracts a lot of attention.
Nobody would suggest that Donald Trump is a humble man, but the big things he's right about. A mountain much needed dose of humility in our politics, very unusually for a presidential candidate. He has questioned the core concept of American exceptionalism. He doesn't think the force of optimism alone can change reality without hard work, just as much as it's about making America.
Great Trump's agenda is about making America a normal country. A normal country. Doesn't have a half trillion dollar trade deficit, a normal country doesn't fight five simultaneous undeclared Wars in a normal country. The government actually does its job. And today it's important to recognize that the government has a job to do what Trump represents.
Isn't crazy. And it's not going away. He points toward a new Republican party beyond the dogmas of Reaganism. He points even beyond the remaking of one party to a new American politics that overcomes denial, rejects, bubble thinking and reckons with reality. When the distracting spectacles of this election season are forgotten and the history of our time is written.
The only important question will be whether or not that new politics came too late. He's well-spoken there. I'll give him that. And just, he is all about disrupting the status. Whoa. In the system he's basically really doing in my simple thinking, I'd say, he's like, look, I don't like how some of this is going down, but the end outcome warrants, the approach in that there's a disruption and a rethink of our political system.
And. How we want to be acting in the world. So I'm prepared for that cost. Yeah. And the, here is his longterm thinking creeping in here, it's a theme I'm seeing emerge in his thinking. He doesn't see Trump as the end. He sees Trump as a means to the end. And the end that Peter's looking for is a reshaping of American politics.
So. I don't think that Trump is going to be that for the Republican party or for, or for politics. So I think Peter May have put too much faith in what he did things Trump can accomplish. Again, regardless of the policies and whatnot. I don't think that Trump is going to have as large of an effect on American politics.
I was maybe hoping, but he was so convicted about, you know, his longterm views. He was willing to stay his reputation on backing a very controversial political figure. And as we start now to just zoom out a little bit, isn't it amazing how distinct each and every one of our investors have been the, just the force and clarity of their thinking.
And I think what we can learn from Peter is be one of a kind, both personally, and your business. Challenge the status quo have the right thinking, but be courageous in espousing that Chad, I think these four investors probably being the most articulate communicators of ideas across the entire. Siri and cross the entire history of our show.
What do you think? Yeah, I think they certainly have some of the most fully formed and tested mental models that many of the entrepreneurs that we've profiled, they've been kind of operating in the same company for their entire lives, some of them. So they only kind of have one test lab environment to test out their ideas.
Whereas all of these investors, Paul Graham they've hosted, was it like 2000 startups in Y Combinator Ray Daleo and Warren buffet are looking at thousands of potential investments every single year, but you know, only pulling the trigger just a few times. There are certain along with the authors, the most academic, and I think their ideas of then most rigorously tested of any of the subjects that we've profiled here on the show.
Hmm, it's fascinating. So here's my sort of question for you, Chad, we've kind of digested these learnings and lessons from Peter teal. Is there one of them in particular that you can pick out and say, I'm going to use that tomorrow. Like as one of these kind of striking, you're like, Oh, Oh my gosh, I see if I had to formulate it.
Now it'd be something along the lines of is what I'm doing now. Unique enough to be making an impact 10 years from today. Combining his monopolistic thinking with his longterm thinking, that's kind of a question that I might ask myself and you listen, and there's going to ask yourselves to put into perspective maybe what your next project is or yeah.
How you're investing in spending your time. What comes to my mind is like, am I creating a market of one, whether it's at work with quality clients or advising the gradient guys in Amsterdam or with the moonshots podcast, am I doing something that's really much better than anyone else's doing in that?
Respective space. That's the thing it's really bringing home for me is search out for that remarkable stand alone. One of a kind thinking, yeah, it's been real fun to get the survey across all four of these individuals in this series. We're not stopping. Right. We've got several more series coming up. Many more shows.
Our next series is going to be architects. I'm excited because my wife is an architect. We're going to be jumping into the world of Frank Gehry, Frank Lloyd Wright, and got the two Franks there, but also in Zahara deed. And the angles to more contemporary will slightly younger than the other two architects.
Yeah. I have a personal angle on this and that both my grandfather and my uncle are architects. So this is really close to home. I have memories. I've been like seven years of age going to my grandfather's office and sitting on one of those classic architectural standing desks. I would stand there or sit there and he'd give me these really fancy color pencils.
And just let me draw on these massive Awan sheets of paper. And I can just. See it in my mind as if it was yesterday. So I am so inspired by Zaha Hadid. I actually got to visit one of her buildings recently in Vienna. It was amazing. And I just can't wait to see what we're going to find there. I wonder how similar slash different they are too.
Know some of the authors or investors that we recently studied. Yeah, I'm very interested to see if there's any parallels to someone like lady Gaga, the more kind of I'll call them artists or crafts people amongst the innovators we've profiled. You know, we've gotten like the heavy managerial types, like Peter Drucker and bill Belichick.
But yeah, I'm very interested to see what we can learn in a discipline like architecture. Yeah. And I think we should also tease out that we will have another live show coming soon. So we are working on plans for that. And it's, it looks very likely that we might be in your hometown, Chad. Yeah. In New York city.
Here you come. So we go into the big apples. So more news on that in the next episode of the moonshots podcast, what a blast. I can't believe we've already finished the investor series. Chad, this is Epic. I feel the need to be even more courageous about my convictions. Having heard Peter we're both seem to be asking how we build a longterm company.
That's in a market of one. So. Plenty of thinking before our next show. It's been great. So thanks Chad. Tonight in New York city, you're going to kick it back a little bit in Netflix in dinner. Oh, no back to work for me. Oh my gosh. Yeah. I pretend that my dog, Ella complains when we come home because she's been at the coal mine all day.
So I brought her home early so that I could go back and toil away. Uh, good on you. Good on you. Well, listen, Chad, thank you so much. For being my partner in this is so fun and it was so good to see each other last week in New York. And can't wait to do a live show from New York. So lots of good things to look forward to.
Right? Yeah. Looking forward to it. And another collaboration too. Yes. I know. I know the world is good. So thank you to you, Chad. Thank you to our audience. It's been wonderful to learn together for the last hour or so. So we are at the end of the moonshots podcast. That's around.