I enjoyed the lecture, but I somewhat disagree with the scientist statement about how Y is close to 0. I think X is the one that is 0 because when the scientist makes an invention the market is so new that there is no market yet. Within this low market the Y value will be high because that is the only thing that exist in it.
Am I the only one who thinks this way? or am i misunderstanding his statement. It could just be a different side of the same coin.
Maybe Thiel was trying to keep the arguments simple. Basically you are correct. Thiel's example of Uncle Albert
is not so good: Einstein long had all the money he wanted and, then, what he really wanted, free time to pursue research in physics.
Yes, Einstein seemed not interested in making $1 billion.
But, let's see: What about Steinmetz, electrical engineering, and GE? What about A. Viterbi and Qualcomm? What about the inventors of RSA, that is, Rivest, Shmmir, and Adleman? What about the researcher founders of some small research oriented pharmaceutical companies? Then there is research mathematician James Simons who used something between his ears to make ~$12 billion or so.
And there's R. Bixby, long a prof at Rice,
lone a leading researcher in mathematical programming,
at one time Editor in Chief of Mathematical Programming,
and
creator of CPLEX, now owned by IBM. The story goes
that Bixby has a relatively nice house in Houston.
And I would differ with Thiel on the Wright brothers. They sold copies of their first successful flyer to all who wanted to get into aviation on the ground floor. And there was Curtiss Wright that was still a viable airplane
engine builder in WWII. There was a lot of progress, call it research and/or engineering, in aircraft engines from
Kitty Hawk to WWII.
Oh, I almost forgot: Edison who
was definitely interested in money.
Sometimes the researchers do not much want to
get paid a lot, but sometimes they do and do.
Or what about the computer scientist Lawrence Page? He managed to extract some value from his contributions. This argument of Thiel's is only correct if you regard any scientist who makes money as a non-scientist.
Thiel did seem to mention that scientists sometimes
regard other scientists who are also interested
in making money as not so good or proper scientists or
some such!
But your example is correct.
I get the impression that somehow Thiel is a bit
down on the money making potential of research.
When a scientist makes a new breakthrough that adds a lot of value to society, X by definition is large (X = value created). "Value" doesn't necessarily need to be monetary, it could be lives saved or some other metric, though eventually I think most big breakthroughs do become monetizable in some form, and his point is that the inventing scientist generally captures very little of that X.
Am I the only one who thinks this way? or am i misunderstanding his statement. It could just be a different side of the same coin.