Shedding light on the mysterious mind of Peter Thiel
It is said that the best books don’t make you feel convinced, but instead make you feel as if you knew all along what they were going to say. Peter Thiel’s Zero To One: Notes on Startups, or How to Build the Future published in 2014 is one such work.
Zero to One started as a set of detailed notes by a student in Thiel’s startup class at Stanford. The book details the methods for success in a field the author knows well, both as a company founder at Paypal and a venture capitalist: entrepreneurship. But this book isn’t as narrow in scope as one might expect from that description. The book espouses a way of looking at the world that Thiel calls “definite optimism.” Not only that, but Thiel extends his points into the political realm.
Zero to One breaks down ways of thinking about the future into a two by two array. First off, there is indefinite pessimism, which holds that the future is wholly uncontrollable and that nothing can be done to stem the tide of decline. He ascribes this view both to “philosophers of the ancient world” and in present-day Europe. Meanwhile, to modern China is attributed an attitude of definite pessimism, a view in which the future is expected to be worse than the present but preparations can be made with regards to it. In Thiel’s model, present-day America has an attitude of indefinite optimism in which the future is guaranteed to be better than the present.
At Cornell, many students become software engineers thinking it a sure pipeline to a high net worth. Or at least, people did. Nowadays, things are different. The low-risk, conventional path is not as secure as it once was, with many computer science graduates struggling to find jobs. New and truly innovative paths are needed, not “innovation” as a buzzword to be repeated and not understood.
But what of the fourth category? Definite optimism, or the view that the future can and will be made better by means of plans executed in the present, Thiel ascribes to the West between the 1600s to the 1960s. Definite optimism is not exactly the ideology of progress, but is instead the ideology that makes progress happen. It is the worldview that Thiel ascribes to successful startup founders and more generally anyone who goes “from Zero to One,” creating something new rather than simply repeating and extending what already exists.
So what caused the transition from definite to indefinite optimism? Thiel credits this change to finance taking primacy over engineering due to a highly successful market in the 1980s, as well as Baby Boomers having experienced gradual improvements in their quality of life and increases in wealth consistently in that time.
The economy is not the only thing that has been affected by this attitude shift. Ballooning entitlement spending rather than discretionary spending is the government’s way of solving issues by means of indefinite band-aids rather than concrete plans. A politics focused on the following of certain procedures instead of substantive differences in goals, meanwhile, places the focus of national energies on decision-making processes rather than on making decisions.
Perhaps one of Thiel’s more controversial statements in this book is his claim that competition should be avoided in the corporate sphere. Rather, one must carve out space for one’s self by creating a new market. If one is competing within an existing market , a ten-fold improvement from the existing products on the market is required. Additionally, he posits that one ought to expand the market participated in by their company over time in order to grow. Thiel specifically points to the example of Amazon–a company that began with books, moved to other physical media, then transitioned to selling nearly everything online–as a company that successfully expanded its market.
Thiel mentions the fact that in a round of investments, it is usually one single company that outperforms all the others. The very term “unicorn startup” suggests this singularity, but it is important to remember the vast differences in outcome between even carefully selected recipients of investment. Successful startups are rare, and indeed when someone asked Thiel in a Reddit “Ask Me Anything” what the hidden meaning in his book is, he responded by saying, “Perhaps you should not become an entrepreneur.”
Also present in the book are references to the French philosopher René Girard, who is known for his anthropological and philosophical theories regarding the role of the scapegoat. Girard posited that most human desires originated in mimesis, or copying others’ desires, and that this naturally leads to conflict. Conflict, meanwhile, also follows this mimetic pattern, and eventually everyone in a given community latches on to a single person–a scapegoat–who is “sacrificed” resolving the tensions in society for a time. Christ, the perfect scapegoat in this system, along with the Scriptures can break humanity out of the pattern of scapegoating. Girard’s thesis is not exactly that of the Catholic religion he professed, but Thiel holds it in high regard. The references to Girard’s theories at times seem disconnected with the rest of the book’s content, but when combined with Thiel’s own story of breaking out of conformity after his highly tracked life led him into a Big Law job he hated, it makes more sense why these were included. One imagines Thiel speaking to his Stanford class about the origins of ancient ziggurats in the sites of execution by stoning.
From Zero to One has been widely praised, and rightly so—it is not just about founding companies. The lessons contained within can be applied to a wide range of topics. Thiel’s ideas concerning innovation and definite optimism have only become more pertinent in the decade since the book’s publication.
