I have started listening to a lot of podcasts. There are a few that are really good and there are a few that have great ones in between. One of the former is Tim Ferris’ podcast called, unsurprisingly, The Tim Ferris Show. He’s the guy who wrote the Four Hour Work Week and since then has been a branding monster online.
Here’s the interview Tim did with Peter Thiel. Largely considered one of the smartest minds in investing. I took some notes. The questions are bolded (Tim) and the answers are all Peters. If you have the time you should give the whole thing a listen. This is not a transcript, it is just what I was listening to and writing together in a way that helps me come back and re-think about some of the ideas posted by Peter.
His central theme is about contrarian thinking and not following trends. He talks about a way of thinking that is brutally honest. Tim’s questions are very good and the answers are filled with nuggets of wisdom. My advice is scan through the questions see what he has to say and then think about it in your own way some more.
Here are my notes from the interview. If you are listening to it then the voice of the interviewee is not Tim Ferris but Blake Masters. He is the guy that attended Peter’s class and took notes from it and then co-wrote the book.
What is one thing you believe in that few others do?
This question is much harder to answer than it sounds. I think technology is far more important than globalization even though people are far more focused on globalization which is copying things that work and much less on technology and doing new things. You should look at technology as the main driver for the 21st century. A second answer I believe in business. Capitalism and Competition are antonyms not synonyms. A capitalist is someone who is in the business of acquiring capital. In a world of perfect competition all the capital is competed away. For example the Restaurant scene in SFO has a lot of competition but isn’t capitalistic because no one is really making any money. Whereas Google is incredibly capitalistic because they have made tons of profits but has never had any real competition since 2002.
What do you wish you know about business 20 years back?
There’s no need to wait. I went to law school and stanford but it wasn’t till I started to Paypal that I realized that you don’t have to wait to start something. If you have a 10 year plan and know how to get there, you have to ask why can’t you do this in 6 months? Sometimes it’s necessary to go through the 10 year tenure but you should always ask the question to know whether it is a story you are telling yourself or is that your reality.
What do you think about failure? How important is it in business?
It’s massively overrated. Most businesses fail for more than one reason. You often don’t learn anything when a business fails. Because the failure was overdetermined. You’d think it was because of reason 1 that it failed but it could actually be because of reasons 1 through 5. The next business you start would fail for reason no 2 and 3 and so on. So I think people don’t learn much from failure. It ends up demoralizing and damaging in the long run to morale. My sense is the death of a business is tragic not some beautiful educational imperative that is the way of evolution or progress.
When do you think of the word successful, who comes to your mind first and why?
Mark Zuckerberg. I think the why is silly. Someone like Elon Musk. Serial entrepreneur that’s created multi billion dollars businesses. What they have in common is they are relentless and don’t stop. Every day they are starting and learning something new. People wonder if Facebook was a fluke. But the more you spend time with Mark and people like him you realize the less plausible that theory is.
What are the biggest tech trends you see for the 21st century?
I don’t like trends because once it becomes a trend you have many people copying it and competing in it and it’s harder to distinguish yourself from it. When you generally have a popular trend you don’t want to be the fourth online pet food company in the late 90s. Being part of a trend is detrimental. Instead think of it in terms of vision. What is a unique problem that people aren’t solving anywhere? When Elon started SpaceX he wanted to move people to Mars. Whether or not you agree with that mission statement it uniquely motivates a lot of people to work with him. It is because every moment in technology only happens once. It is a unique constellation of events, people and stuff that come together to create something unique.
Why do investors spray and pray and focus on a few companies. Do you have any rules you have or tips for vcs?
People would say that they say spray and pray thing with their portfolio theory or some theory of diversification but that’s not true. Real reason is they lack conviction and too lazy to find companies that actually work. I don’t like that because you shouldn’t treat companies as lottery tickets or people who start it as such guys. The Anti lottery ticket approach is to be concentrated. That forces you to have high levels of conviction. You shouldn’t think in losing money and try to be concentrated and have high levels of conviction to make good investments.
What problem do you face that no one has solved?
Real and continued progress against aging and death which is not just my problem. We have 100,000 people who die daily. Diseases linked to old age and we are doing so little to attack this problem. People are in denial or acceptance, which are opposite extremes, but both stop you from doing anything. Passive modes are what these are it would be better to spend time fighting death. We should spend more time fighting death. People say that death is natural there is nothing more natural than to fight it.
What do you say to the 9.7 million unemployed people in America?
The Micro answer is there’s no one size fits all approach there are different facts and circumstances people find themselves in, we need to look at it specifically. look at the factors that led to it. What type of people are they? Students with debt or someone with lots of experience but not enough capital? Granularity is important here.
Macro answer. We need to find ways to have more growth in the economy. 4 % a year growth in the usa would solve a lot of these problems. The challenges is that we have had 1 or 2 % growth rate for the last few years. That sort of growth rate is not enough to drive this. Technology is the key driver for USA growth and anything we can do to accelerate that technological revolution is something that we should focus on.
Your position on college and higher education is hypocritical since you are a stanford and law school graduate.
I think people will always find objections in something or the other. I think they are likely to complain in any event. My view is not hypocritical because its not one size fits all. I never said no one should go to college. Not everybody should do the same thing. There is something very odd about a society when all the smartest people get tracked into one path where same courses same careers and it is very limiting for our society. It shows a lack of diversity in our thinking and in our society. I was guilty of this myself its possible I might have done it again, I would think much harder and ask why am I doing this and what is the reason because I did well in test courses and got grades? Or is it because it is prestigious? Or am I extremely passionate about practicing law? There are good answers and bad answers and retrospectively in my early 20’s I was focused on the wrong answers.
You studied philosophy what does that have to do with business?
I’m not sure how much the formal study of philosophy helped, the fundamental question of philosophy is important. What do people agree by convention and what is the truth? There is a consensus of things for people to be true maybe its right and maybe its not. Convention cannot be a shortcut for truth. Silicon valley is filled with conventional thinking and one of the reasons and it may flipped them even more than others is that there are so few markers since we are focused on the future. The future is what they are focused on and people are not sure about it with just a few markers. They will find shortcuts listening to someone else without knowing or figuring it out. The question of thinking for yourself and breaking convention is very important in silicon valley and other places.
What do you think the future of education is?
I don’t like that word education. It is an extra-ordinary abstraction. I prefer learning as a word. There are all these granular questions. what does it mean you are learning? what is it you are learning? why are you learning? Is it an investment decision? Is it a competitive one? is to be in a partying mode? Is it a consumption decision? Is it a tournament where you are just beating other people? If we move beyond that education bubble the future will be one that people can speak more clearly about these things and is it a tournament or trade or party you have to have a specific skill.
Engineering is opposite of education, it is actually a skill and you are taught about how to learn. It’s the anti education in that sense it is a paradigm for some of the things we will have in the future. You aren’t learning for learning or not learning anything. We will have a much less size of a one size fits all approach. The big track institutions are charging more and more and giving less and less. We are at the point where it will look very different on the brink of change. Like the old catholic church institution, corrupt and spreading messages like you are going to hell till the reformers came along. You have to figure out your salvation on your own.
What are your daily habits and routines
I feel terrible when I’m answering that question is because many things are unstructured. Daily thing I try to do is to have conversations with the smartest people and try to learn new things daily. I know and develop my thinking and i talk to the same people over a lot of time and its mostly group of friends or people I work with so it’s not like the MTV format of talking to a new person all the time. A group of friends who you have worked with a long time.
What one thing would you like to change about yourself?
It’s hard to answer because it asks why haven’t I improved on it already. Looking back I was insanely tracked and insanely competitive and when you are very competitive you get good at the things you are competing on but it comes at the expense of losing out on many other things. So if you are a very competitive chess player you might become a great chess player but you might be missing out on a lot of things. I have become more self aware over the years over all the competition we have spent time on and daily I think about being less competitive and more successful.
What did you want to achieve by writing zero to one the book?
When you write a book like this you want to reach as broad as an audience as possible. There are many things I have learned as an entrepreneur and investor in the tech industry and I wanted to share that with the wider world. I think this question of technology is critical in the future. There’s a hopeful and alarmist point of view in the book. The alarmist side is if we don’t get our act together and don’t innovate we will have a very bleak future. The positive side or the hopeful side is that its not all the low hanging fruit has been picked and there are many secrets that can be unlocked for a better future. Most books take a 30 page essay and make it a 300 page book. I tried to do the opposite. I took everything I learned in the last 15 years and distill it into 200 pages so that you can read this in one afternoon. Writing this has helped me discipline my thinking and I hope it does the same for everyone who reads it.