Peter Thiel

"For Musk, Thiel, and other PayPal executives, urgency was the default posture on all things—including and especially its international expansion campaign. Braunstein had only just arrived in London when Musk dropped in for a speaking engagement. They agreed to meet at the small London office. “Within an hour, [Elon’s] grilling me about the regulatory environment,” Braunstein remembered. “And I said, ‘Elon, I’ve literally been here for a week!’ ”"

"Earlier than many of his colleagues, Thiel saw X.com as an existential threat. “Peter likes to confront things. He likes to know if he’s wrong,” Nosek said. “He’s actively looking for how things could break, how things could fail—constantly. Much more so, and much more proactively, than a lot of entrepreneurs I know.” Thiel determined that X.com could simply spend Confinity out of existence. “Peter was good to recognize that they were a real threat,” Malloy said."

"Given a teetering market and a take-no-prisoners competitor, Thiel and others in the company began considering an alternative course. “A lot of us came to the conclusion that this would be a winner-take-all market, and that this should be a single company,” Confinity cofounder Ken Howery said. “Or both of us would spend ourselves into oblivion.”"

"Thiel’s chess opponents remembered his aggressive style. “He was merciless,” a fellow player, Ed Bogas, remembered. “There was no humor in the chess playing.”"

"Thiel’s interest in Girard often led him to zig where others zagged—an instinct that informed the IPO filing. “If you’re in a world where no one goes public,” Thiel explained, “maybe paradoxically, that is the time to go public. Because, you know, it’s a positive counterpoint to the chaos or something.”"

"In hiring David Sacks, Thiel pulled rank and overruled the team’s objections. This was a rare move for Thiel, who believed Sacks a rare candidate: After all, few people would come into an interview guns blazing against their prospective employer’s flagship product. Thiel valued bracing honesty, and he trusted that Sacks would speak candidly. “Peter said, ‘I need people here I can scream at,’ ” Sacks remembered."

"Earlier than many of his colleagues, Thiel saw X.com as an existential threat. “Peter likes to confront things. He likes to know if he’s wrong,” Nosek said. “He’s actively looking for how things could break, how things could fail—constantly. Much more so, and much more proactively, than a lot of entrepreneurs I know.” Thiel determined that X.com could simply spend Confinity out of existence. “Peter was good to recognize that they were a real threat,” Malloy said."

"Just cover the basics like health insurance and then promise what no others can: the opportunity to do irreplaceable work on a unique problem alongside great people. You probably can’t be the Google of 2014 in terms of compensation or perks, but you can be like the Google of 1999 if you already have good answers about your mission and team."

"Apple’s value crucially depended on the singular vision of a particular person. This hints at the strange way in which the companies that create new technology often resemble feudal monarchies rather than organizations that are supposedly more “modern.”"

"MONEY MAKES MONEY. “For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them” (Matthew"

"Tolstoy opens Anna Karenina by observing: “All happy families are alike; each unhappy family is unhappy in its own way.”"

"Max Levchin, my co-founder at PayPal, says that startups should make their early staff as personally similar as possible. Startups have limited resources and small teams. They must work quickly and efficiently in order to survive, and that’s easier to do when everyone shares an understanding of the world."

"At PayPal, our initial user base was 24 people, all of whom worked at PayPal. Acquiring customers through banner advertising proved too expensive. However, by directly paying people to sign up and then paying them more to refer friends, we achieved extraordinary growth. This strategy cost us $20 per customer, but it also led to 7% daily growth, which meant that our user base nearly doubled every 10 days. After four or five months, we had hundreds of thousands of users and a viable opportunity to build a great company by servicing money transfers for small fees that ended up greatly exceeding our customer acquisition cost."

"To understand the scale of this variance, consider another of Google’s computer-for-human substitution projects. In 2012, one of their supercomputers made headlines when, after scanning 10 million thumbnails of YouTube videos, it learned to identify a cat with 75% accuracy. That seems impressive—until you remember that an average four-year-old can do it flawlessly. When a cheap laptop beats the smartest mathematicians at some tasks but even a supercomputer with 16,000 CPUs can’t beat a child at others, you can tell that humans and computers are not just more or less powerful than each other—they’re categorically different."

"Why would someone join your company as its 20th engineer when she could go work at Google for more money and more prestige? Here are some bad answers: “Your stock options will be worth more here than elsewhere.” “You’ll get to work with the smartest people in the world.” “You can help solve the world’s most challenging problems.” What’s wrong with valuable stock, smart people, or pressing problems? Nothing—but every company makes these same claims, so they won’t help you stand out.…"

"Most sales are not particularly complex: average deal sizes might range between $10,000 and $100,000, and usually the CEO won’t have to do all the selling himself. The challenge here isn’t about how to make any particular sale, but how to establish a process by which a sales team of modest size can move the product to a wide audience."

"Why would someone join your company as its 20th engineer when she could go work at Google for more money and more prestige? Here are some bad answers: “Your stock options will be worth more here than elsewhere.” “You’ll get to work with the smartest people in the world.” “You can help solve the world’s most challenging problems.” What’s wrong with valuable stock, smart people, or pressing problems? Nothing—but every company makes these same claims, so they won’t help you stand out. General and undifferentiated pitches don’t say anything about why a recruit should join your company instead of many others."

"Tesla’s success proves that there was nothing inherently…"

"At Founders Fund, we saw this coming. The most obvious clue was sartorial: cleantech executives were running around wearing suits and ties. This was a huge red flag, because real technologists wear T-shirts and jeans. So we instituted a blanket rule: pass on any company whose founders dressed up for pitch meetings. Maybe we still would have avoided these bad investments if we had taken the time to evaluate each company’s technology in detail. But the team insight—never invest in a tech CEO that wears a suit—got us to the truth a lot faster. The best sales is hidden. There’s nothing wrong with a CEO who can sell, but if he actually looks like a salesman, he’s probably bad at sales and worse at tech."

"LinkedIn has done exactly this for recruiters. When LinkedIn was founded in 2003, they didn’t poll recruiters to find discrete pain points in need of relief. And they didn’t try to write software that would replace recruiters outright. Recruiting is part detective work and part sales: you have to scrutinize applicants’ history, assess their motives and compatibility, and persuade the most promising ones to join you. Effectively replacing all those functions with a computer would be impossible. Instead, LinkedIn set out to transform how recruiters did their jobs. Today, more than 97% of recruiters use LinkedIn and its powerful search and filtering functionality to source job candidates, and the network also creates value for the hundreds of millions of professionals who use it to manage their personal brands. If LinkedIn had tried to simply replace recruiters with technology, they wouldn’t have a business today."

"People have intentionality—we form plans and make decisions in complicated situations. We’re less good at making sense of enormous amounts of data. Computers are exactly the opposite: they excel at efficient data processing, but they struggle to make basic judgments that would be simple for any human."

"The best startups might be considered slightly less extreme kinds of cults. The biggest difference is that cults tend to be fanatically wrong about something important. People at a successful startup are fanatically right about something those outside it have missed."

"Most of the world dreams of living as comfortably as Americans do today, and globalization will cause increasingly severe energy challenges unless we build new technology. There simply aren’t enough resources in the world to…"

"Doing something different is what’s truly good for society—and it’s also what allows a business to profit by monopolizing a new market. The best projects are likely to be overlooked, not trumpeted by a crowd; the best problems to work on are often the ones nobody else even tries to solve."

"Your company needs to sell more than its product. You must also sell your company to employees and investors. There is a “human resources” version of the lie that great products sell themselves: “This company is so good that people will be clamoring to join it.” And there’s a fundraising version too: “This company is so great that investors will be banging down our door to invest.” Clamor and frenzy are very real, but they rarely happen without calculated recruiting and pitching beneath the surface."

"Could successful energy startups be founded after the cleantech crash just as Web 2.0 startups successfully launched amid the debris of the dot-coms? The macro need for energy solutions is still real. But a valuable business must start by finding a niche and dominating a small market. Facebook started as a service for just one university campus before it spread to other schools and then the entire world. Finding small markets for energy solutions will be tricky—you could aim to replace diesel as a power source for remote islands, or maybe build modular reactors for quick deployment at military installations in hostile territories. Paradoxically, the challenge for the entrepreneurs who will create Energy 2.0 is to think small."

"In general, the higher the price of your product, the more you have to spend to make a sale—and the more it makes sense to spend it. Distribution methods can be plotted on a continuum:"

"Technology companies follow the opposite trajectory. They often lose money for the first few years: it takes time to build valuable things, and that means delayed revenue. Most of a tech company’s value will come at least 10 to 15 years in the future."

"José Raúl Capablanca put it well: to succeed, “you must study the endgame before everything else.”"

"Therefore every entrepreneur must think about whether her company is going to succeed and become valuable. Every individual is unavoidably an investor, too. When you choose a career, you act on your belief that the kind of work you do will be valuable decades from now."

"The first team that I built has become known in Silicon Valley as the “PayPal Mafia” because so many of my former colleagues have gone on to help each other start and invest in successful tech companies. We sold PayPal to eBay for $1.5 billion in 2002. Since then, Elon Musk has founded SpaceX and co-founded Tesla Motors; Reid Hoffman co-founded LinkedIn; Steve Chen, Chad Hurley, and Jawed Karim together founded YouTube; Jeremy Stoppelman and Russel Simmons founded Yelp; David Sacks co-founded Yammer; and I co-founded Palantir. Today all seven of those companies are worth more than $1 billion each. PayPal’s office amenities never got much press, but the team has done extraordinarily well, both together and individually: the culture was strong enough to transcend the original company."

"When Baby Boomers grow up and write books to explain why one or another individual is successful, they point to the power of a particular individual’s context as determined by chance. But they miss the even bigger social context for their own preferred explanations: a whole generation learned from childhood to overrate the power of chance and underrate the importance of planning."

"Our results at Founders Fund illustrate this skewed pattern: Facebook, the best investment in our 2005 fund, returned more than all the others combined. Palantir, the second-best investment, is set to return more than the sum of every other investment aside from Facebook."

"Ralph Waldo Emerson captured this ethos when he wrote: “Shallow men believe in luck, believe in circumstances.… Strong men believe in cause and effect.”"

"CASH IS NOT KING For people to be fully committed, they should be properly compensated. Whenever an entrepreneur asks me to invest in his company, I ask him how much he intends to pay himself. A company does better the less it pays the CEO—that’s one of the single clearest patterns I’ve noticed from investing in hundreds of startups. In no case should a CEO of an early-stage, venture-backed startup receive more than $150,000 per year in salary."

"Above all, don’t overestimate your own power as an individual. Founders are important not because they are the only ones whose work has value, but rather because a great founder can bring out the best work from everybody at his company."

"The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom."

"You could have 100% of the equity if you fully fund your own venture, but if it fails you’ll have 100% of nothing. Owning just 0.01% of Google, by contrast, is incredibly valuable (more than $35 million as of this writing)."

"A company is the strangest place of all for an indefinite optimist: why should you expect your own business to succeed without a plan to make it happen? Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best."

"Big corporations do better than the DMV, but they’re still prone to misalignment, especially between ownership and possession. The CEO of a huge company like General Motors, for example, will own some of the company’s stock, but only a trivial portion of the total. Therefore he’s incentivized to reward himself through the power of possession rather than the value of ownership. Posting good quarterly results will be enough for him to keep his high salary and corporate jet. Misalignment can creep in even if he receives stock compensation in the name of “shareholder value.” If that stock comes as a reward for short-term performance, he will find it more lucrative and much easier to cut costs instead of investing in a plan that might create more value for all shareholders far in the future."

"Start Small and Monopolize Every startup is small at the start. Every monopoly dominates a large share of its market. Therefore, every startup should start with a very small market. Always err on the side of starting too small. The reason is simple: it’s easier to dominate a small market than a large one. If you think your initial market might be too big, it almost certainly is."

"As Tolkien wrote in The Lord of the Rings: The Road goes ever on and on Down from the door where it began. Life is a long journey; the road marked out by the steps of previous travelers has no end in sight. But later on in the tale, another verse appears: Still round the corner there may wait A new road or a secret gate, And though we pass them by today, Tomorrow we may come this way And take the hidden paths that run Towards the Moon or to the Sun. The road doesn’t have to be infinite after all. Take the hidden paths."

"Improve on the competition Don’t try to create a new market prematurely. The only way to know you have a real business is to start with an already existing customer, so you should build your company by improving on recognizable products already offered by successful competitors."

"Normally we expect opposite traits to be mutually exclusive: a normal person can’t be both rich and poor at the same time, for instance. But it happens all the time to founders: startup CEOs can be cash poor but millionaires on paper. They may oscillate between sullen jerkiness and appealing charisma. Almost all successful entrepreneurs are simultaneously insiders and outsiders. And when they do succeed, they attract both fame and infamy. When you plot them out, founders’ traits appear to follow an inverse normal distribution:"

"early-stage startups are small enough that founders usually have both ownership and possession. Most conflicts in a startup erupt between ownership and control—that is, between founders and investors on the board. The potential for conflict increases over time as interests diverge: a board member might want to take a company public as soon as possible to score a win for his venture firm, while the founders would prefer to stay private and grow the business."

"“Madness is rare in individuals—but in groups, parties, nations, and ages it is the rule,” Nietzsche"

"Startups operate on the principle that you need to work with other people to get stuff done, but you also need to stay small enough so that you actually can. Positively defined, a startup is the largest group of people you can convince of a plan to build a different future."

"The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing."

"MONEY MAKES MONEY. “For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them” (Matthew 25:29)."

"Every entrepreneur should plan to be the last mover in her particular market. That starts with asking yourself: what will the world look like 10 and 20 years from now, and how will my business fit in?"

"VCs must find the handful of companies that will successfully go from 0 to 1 and then back them with every resource."

"At Founders Fund, we focus on five to seven companies in a fund, each of which we think could become a multibillion-dollar business based on its unique fundamentals."

"The lesson for founders is that individual prominence and adulation can never be enjoyed except on the condition that it may be exchanged for individual notoriety and demonization at any moment—so be careful."

"1. The Engineering Question Can you create breakthrough technology instead of incremental improvements? 2. The Timing Question Is now the right time to start your particular business? 3. The Monopoly Question Are you starting with a big share of a small market? 4. The People Question Do you have the right team? 5. The Distribution Question Do you have a way to not just create but deliver your product? 6. The Durability Question Will your market position be defensible 10 and 20 years into the future? 7. The Secret Question Have you identified a unique opportunity that others don’t see?"

"Thiel points to this pressure as the defining characteristic of his PayPal experience. “If you’re at a fantastically successful company like Microsoft or Google,” he explained, “you will infer that starting a new business is easier than it is. You’ll learn a lot of wrong things. If you’re at the company that failed, you tend to learn the lesson that it’s impossible. At PayPal we were sort of intermediate. We weren’t as successful as some of the great successes of Silicon Valley, but I think people sort of calibrated it and learned the best lesson—that it’s hard, but doable.”"

"Thiel was reflecting many years after the IPO, and he acknowledged that such rationales benefitted from the distance of hindsight. The famous rationalist also caught himself laughing at the feelings involved. “I aspire not to be this competitive,” he said, “but I’m not always successful. I don’t think it’s emotionally healthy to be this competitive, but that’s the honest part of what drove it.”"

"Thiel’s interest in Girard often led him to zig where others zagged—an instinct that informed the IPO filing. “If you’re in a world where no one goes public,” Thiel explained, “maybe paradoxically, that is the time to go public. Because, you know, it’s a positive counterpoint to the chaos or something.”"