
Peter Thiel on the Future of Innovation - davidw
https://medium.com/conversations-with-tyler/peter-thiel-on-the-future-of-innovation-77628a43c0dd
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nqureshi
This is an incredibly smart observation, and not made often enough:

"Often the smarter people are more prone to trendy, fashionable thinking
because they can pick up on things, they can pick up on cues more easily, and
so they’re even more trapped by it than people of average ability"

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grondilu
Thiel seems to hope and expect technological progress to improve people's
lives, and this seems to be the main drive for his interest in technology. But
isn't it possible to be interested in technology for the sake of it, for the
"wow" factor only?

I mean, for instance he's very much into medicine, including anti-ageing
medicine. And it seems that the slow pace of progress in this area, when
compared to progress in IT, frustrates him. Me, I don't care much about
medicine. Maybe it's because I'm relatively healthy, but I believe it's also
because most people are healthy, so if suddenly everybody was, it would only
be a quantitative change, not a qualitative one. A healthy human body is not
something new. So, staying young and healthy until you reach say 100? Meh.

If the goal is to improve life, there are other ways to do that rather than
waiting for technological miracles. Money, for one. I mean, the life of a
wealthy person nowadays is, I suppose, absolutely awesome, and it does not
require very advanced tech to be so.

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bantunes
I don't get it - why do people still listen to him (honest question)? Is it
the money? Didn't he just luck out with Paypal? He clearly is all about the
$$$, even advocates that you should actively pursue building a monopoly, since
"competition is for losers" (his words). What gives? Because for me, he's part
of the Valley problem.

~~~
rayiner
Monopolies are great. Almost everything awesome in computing came from
companies insulated in some way from market forces, either because of outright
monopolies, network effects, first mover advantages, etc. Bell Labs and the
ATT monopoly. Xerox PARC, which gave us the GUI, OOP, email, LAN, was
bankrolled by the Xerox copier patent monopoly. Google continues to use its
network effect advantage and above-perfect competition profits to bankroll
stuff like self-driving cars. Perfect competition is the current PC industry.
Lenovo and Acer and HP. Nobody innovates because they can't take any risks
with their frighteningly narrow profit margins.

~~~
tew28
His point about monopolies is widely misquoted and causing a lot of confusion.
I think he should have been clearer about distinguishing creative monopolies
and what we commonly consider monopolies, in the negative sense. There are
nefarious monopolies like Comcast that are insulated from competition because
of an unfair advantage. A more nuanced position should entail something like
the following:

\- We want competition because it allows nefarious monopolies (and other
companies) to be overtaken by better companies.

\- We don't want to discourage companies from attempting to obtain monopolies
in their markets, since this gives them to opportunity to capture monopoly
profits. Monopoly profits are not inherently bad. If a company becomes a
monopoly, we want them to be a creative monopoly.

\- A competitive market in the sense of having low profit margins is very
different from a competitive market in the sense of whether or not new
entrants can come in and compete.

\- It is a bad thing if a company has monopoly power through something other
than being a superior company, is capable of preventing new entrants, and is
uncreative. We want to preserve the ability of new entrants to come into the
market with superior products and overtake monopolies.

(edit: formatting)

~~~
rayiner
He's not misquoted. Read the WSJ op-Ed: [http://www.wsj.com/articles/peter-
thiel-competition-is-for-l...](http://www.wsj.com/articles/peter-thiel-
competition-is-for-losers-1410535536). He's not talking about companies that
enjoy monopoly profits because they offer superior products. He's talking
about companies that enjoy monopoly profits because they have no competitors.
He does posit the "creative monopoly" companies that have no competitors
because they're first to a new market. But that only lasts so long as there
are barriers to entry in your market.[1] And now we're back to regular old
Econ 101 monopolies. The "nefarious monopolies" I mentioned all came into
existence through first mover advantage. But they endured because they were
protected from competition. And much of their innovative legacy came well into
their "static monopoly" phase.

[1] To use Thiel's terminology, it matters how quickly the market moves back
into equillibrium, and that is dictated by the same forces that give rise to
static monopolies.

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tew28
He is talking about companies that enjoy monopoly profits because of superior
products: "I'm not interested in illegal bullies or government favorites: By
"monopoly," I mean the kind of company that is so good at what it does that no
other firm can offer a close substitute."

Distinguishing between "good" and "bad" monopolies is sufficiently complex to
deserve more in-depth exploration. Thiel is smart enough to realize that which
is why I consider his point to be misquoted. Unfortunately, his view is
oversimplified so as to be readily consumed and debated.

He lists characteristics of a monopoly in his book: proprietary tech, network
effects, economies of scale, and branding. First mover advantage is mentioned
as a "tactic, not a goal" \- a chapter is even called "Last Mover Advantage."
Google, for one, was clearly not a first mover in the search space.

~~~
rayiner
It's a contrived distinction. If network effects, like Facebook enjoys in
social media, keep out competition, you're a classic economic monopoly.

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sgt101
The comment about Nuclear Engineering is odd - I have a friend who is earning
~$1400 a day as a consultant disposing nuclear waste, he has work for his
lifetime more or less guaranteed and tells me that the industry has a huge
need for more qualified folk to help clear things up.

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restalis
"earning ~$1400 a day as a consultant disposing nuclear waste"

"work for his _lifetime_ more or less guaranteed"

I don't want to sound sarcastic, but what kind of life span expectancy is
implied in this kind of job?

~~~
sgt101
Well he's the fella sitting in the office, so I don't think he's too
concerned!

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restalis
Thiel views the area of self-driving cars as less regulated (next to biotech),
but for some reason I think that to make it come true the challenge will be
more than technical. The current state of affairs in the legal system is that
there always has to be someone that may take the blame when something goes
wrong. Verdicts ending in "accidents" are not accepted lightly, especially
when human-made things are involved. The entire thing regarding the self-
driving cars has something like a ticking bomb under it waiting to explode in
terms of regulations!

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mseebach
I heard the podcast a few days ago, but I struggled with understanding the
point on globalisation "pulling back" and CA and TX being "inward-looking" vs.
DC and NYC being centres of globalisation.

What do Cowen and Thiel mean by this distinction? What does it mean to be
"inward-looking" in this context, and how will it manifest itself in an edge
over outward-looking/"leveraged to globalisation" places?

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dataker
The shortest criticism is that globalisation doesn't spur scientific
innovation, as it'd be just copying what works. Inward tech development would
take 0->1 while outward would be taking 1 and spread across the world.

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LunaSea
Just don't forget that Peter Thiel is a co-founder of Palantir which is
equivalent to a private-NSA that is currently funded at $1B.

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AndrewKemendo
For the record Palantir doesn't do any data collection or analysis on other
people's data - which is what the NSA does (collection and analysis).

Palantir simply makes overpriced software for groups to do complex network
mapping and connection extraction from raw data - other companies then do
analysis with on their own data sets with the software.

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LunaSea
These groups being essentially the military and the alphabet soup agencies.

~~~
AndrewKemendo
True, however Palantir started with finance/wall street.

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motters
As far as I can tell from his Wikipedia bio, Thiel hasn't done anything
significantly innovative since PayPal. It looks like he supplied money for
some other things, but that's about it.

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levlandau
[https://www.palantir.com/](https://www.palantir.com/) |
[http://graphics.wsj.com/billion-dollar-
club/?co=Palantir](http://graphics.wsj.com/billion-dollar-club/?co=Palantir)

~~~
yummyfajitas
He also runs a hedge fund:
[https://www.clarium.com/](https://www.clarium.com/)

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davidw
I'm reading Thiel's book right now, and have some mixed opinions on portions
of it, but it's certainly an interesting read, and makes you think.

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lukasm
In the book he says "We Live Under A Power Law" I absolutely agree, people
have hard time grokking exponential growth.

In the last chapter, he says that AI is overrated and it's 22nd century
threat. He underestimates Power Law.

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david927
He does that a lot. Universities are irrelevant, unless you went to Stanford
(his school), in which case you are awesome.

It's clear that he wants to think critically but he's somehow not able to
bring himself to his own conclusions.

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santiagobasulto
I'm surprised by the amount of hate towards Peter Thiel. I consider him one of
the bests. I think his class on How To Start a Startup was the best one, with
really thoughtful insights. It's obvious he's going to be focused on the
money, he's an investor.

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normloman
Surprised? The guy once said

"Since 1920, the vast increase in welfare beneficiaries and the extension of
the franchise to women—two constituencies that are notoriously tough for
libertarians—have rendered the notion of 'capitalist democracy' into an
oxymoron,"

The guy implies the world would be better off if women couldn't vote, and
you're surprised people hate him?

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eli_gottlieb
Well, _I_ for one read his statement as plain evidence that what we need to
jettison is not democracy, but instead, of course, capitalism.

I realize this is nowhere near his intended reading of his own statement, but
if the shoe fits, wear it!

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happyscrappy
Being opposed to capitalism is like being opposed to evolution, hell even the
Communists are not crazy enough forgo capital markets.

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orbifold
Economists like to portrait their ideologies to be similar to laws of physics
or in your case biology. The truth is they don't even come remotely close to
an accurate model of reality nor is anything they study inevitable, but purely
a product of social conventions. That they come up with various a priori
reasons why things have to be this way (right to private property etc.) is not
the same as discovering the natural order of things, as is done in the natural
sciences. As someone with a natural science background I find it fairly
offensive to compare that culture of intellectual dishonesty and boastfulness
to some of the greatest intellectual achievements in natural science.

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happyscrappy
>I find it fairly offensive to compare that culture of intellectual dishonesty
and boastfulness

Someone will always be offended no matter what you do but the proof is in the
pudding. Capital needing to flow to where it is most useful should not make
you take personal offense.

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orbifold
Well utility is a drastically oversimplified substitute for the
extraordinarily complex processes by which capital is actually distributed, in
the sense that it has the role of energy in physics but cannot be defined in a
similar precise manner. Moreover capital itself has no agency (it doesn't need
to do anything, compared to say electrons) and any model that describes the
flow of capital doesn't have the same standing as say Maxwells equations, they
aren't even phenomenological. I guess Finance is the closest thing in
economics where you can come up with more or less accurate models for the
prices etc. But again those are human constructs and don't have anything in
common with laws of nature.

