

Peter Thiel's Very Negative – And Very Useful – Advice for Entrepreneurs - webdisrupt
http://www.entrepreneur.com/article/239420

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graycat
> competition will ALWAYS be there

Yup, that is VC catechism. But, let's see:

What competition did Xerox have for their model 914 copier? Gee, someone else
had a license to print money?

What competition did IBM have for their line System 360? Another license to
print money.

What competition did Boeing have for their 707? It dominated transportation
between the US and Europe, drove out of that business both steamships and
piston powered airplanes. And, it was a license to print money.

What competition did HP have for their HP-35 scientific calculator? Elegant
and powerful beyond belief, especially for the time. Some of the best STEM
people in the world nearly worshiped the thing. Price no object. License to
print money.

What competition did IBM have for their DB2 relational database system with
SQL? You want to use network, hierarchical? Gotta be kidding. Maybe if you pay
your database application developers 10 cents a hour and want projects to run
a few years instead of a few weeks.

For the first IBM magnet disk storage system? Otherwise you want, what,
punched cards?

The US have for A-bombs starting in 1945? A big tragedy is what the US lost
taking Iwo Jima and Okinawa when just two B-29s from Tinian were all that was
needed.

The US have for the proximity fuse during WWII?

The US have for the SR-71 -- Mach 3+, 80,000+ feet, 2000+ miles without
refueling? One never got shot down.

The US have for Aegis phased array radar? Aim the thing nearly instantly, just
electronically, and track some huge number of targets all from just one radar.

The US have for Keyhole, basically a Hubble but aimed at the earth and before
Hubble?

The US have for the first atomic powered submarines?

The US have for GPS, the first Navy version and the first USAF version?

The US have for the Abrams tank, shoot 2 miles, at night, through fog, while
moving against a Russian tank with range 1 mile that needed a clear day and
had to stop to fire. Which tank do you want to be in?

The US had for the F-117 -- fly through the Baghdad anti-aircraft artillery
and anti-aircraft missiles for the whole of Gulf War I without a single
scratch.

The US have for the B-2?

> Your back will always be against the wall, it'll never be perfect, and
> please don't ever expect an overnight success story the day that you
> launch.It'll be a long dreadful process, ...

Ah, guess that somehow the Lockheed Skunk Works never understood that lesson.
Instead, Kelly Johnson showed up in DC with a pile of papers, outlined the
SR-71, got the project approved, built the thing, and essentially everything
went as planned. Same for essentially all the projects I listed.

My conclusion: Poor Peter has spent far too much time with poor projects.

Peter, here is a simple lesson for you: Go to a golf course that has a par 3
whole and for a year or so get the list of players who made a hole in one.
Then notice that really expert players are only a small fraction of the list.
So, you want to conclude that being an expert player is not important in
making a hole in one? Sorry, Peter: Mostly the list has poor players who got
lucky, but there were so many more poor players than expert ones that lucky
poor players dominated the list. So you conclude that actually planning and
intending to make a hole in one is pointless.

For the projects I listed, each was like a hole in one that was planned,
really better than making a hole in one, where the project leaders, _called
their shot_ in advance. They didn't just get lucky. Indeed, such US DoD
projects have much higher _batting average_ than Silicon Valley.

Peter, you've just got to take a two hour course on "STEM Project Planning
101". For a reading list, read about each of the projects above.

Want to get the ROI of your fund up, way up? Well, go only with projects like
the SR-71 -- a STEM project with a powerful, valuable result, with essentially
no competition, and that can be executed with high reliability from the
initial plans just on paper.

Of course, to do this, you'd have to be ready, willing, able, and eager to
read and understand technical project plans, and you'd have to give up on your
idea that college dropouts are the best STEM project leaders.

And you'd have to give up on your criterion of flying cars -- any competent
STEM project leader could tell you that the energy, power, control, and cost
required are way too high. And, safety would be a disaster.

Thankfully for US national security, the US DoD follows ideas on projects much
better than yours.

Peter, for STEM, SV is a grand disaster; everyone on Sand Hill Road should be
ashamed. If they had any comprehension of just how incompetent they are, then
they would be just humiliated.

Instead, got a bunch of lawyers, MBAs, history majors, stock market analysts,
_biz dev_ marketers, etc. Hopeless.

The problem sponsors at NIH, NSF, and DARPA can evaluate projects just on
paper. Apparently there is not a single VC in SV that can do that.

Peter, net, your advice just sucks. For better advice, draw from the
magnificent, unchallenged, unique world-class, grand successes of the US DoD
for the past 70 years or so.

Peter, go back to school and get a good Ph.D. in a STEM field, do some serious
projects, and then revise your advice. In the meanwhile you are just your
wasting time, effort, and money and that of anyone following your advice. You
should be ashamed. At first I was really shocked at the grand incompetence of
SV. Now I just laugh, but it's getting to be no longer funny.

There is hardly a single IT VC in SV that could get job in a serious and
competent STEM project for the US DoD. Total bummer.

The US DoD has done fantastic things -- e.g., won Gulf War I with more
injuries from R&R, e.g., softball, than from enemy action. Meanwhile SV IT VC
ROI just sucks:

[http://www.avc.com/a_vc/2013/02/venture-capital-
returns.html...](http://www.avc.com/a_vc/2013/02/venture-capital-
returns.html#disqus_thread)

