Finding the Secret Path
Takeaways from Peter Thiel, billionaire entrepreneur and partner in the leading venture capital firm Founders Fund
Peter Thiel was a co-founder of PayPal, Palantir Technologies and Founders Fund, as well as an early investor in SpaceX, Facebook and LinkedIn. He was ranked #4 on the Forbes Midas List of 2014 and is the #1 New York Times bestselling author of Zero to One.
“Every moment in business happens only once. The next Bill Gates will not start an operating system. The next Larry Page won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.” -Peter Thiel
Do One Thing Uniquely Well
“What do you know that’s true that nobody else understands? What great business exists that nobody is building?”
If you are starting a business, these are important questions to ask yourself. You need to find that one thing that will set you apart from other companies. You need to know why you are starting this company, when there are already so many other companies working to solve the same problem. What gives you the edge in this business? What skill sets and knowledge do you have to offer that sets you apart? How do you differentiate yourself from the crowd?
One of the most essential parts of creating a successful startup is to be doing one thing uniquely well, better than anybody else in the world. However, just creating value isn’t enough- you also have to capture some of the value you create.
Aim For A Monopoly
If you want to create and capture lasting value, look to build a monopoly
If you are a founder or entrepreneur, you want to aim to build a company that is one of a kind, that is so far differentiated from the competition that it’s not even competing. You want to aim for a monopoly. By creating a unique company, you can stand out and dominate your market.
A great example of a monopoly is a company like Google, which has had no serious competition in search since 2002 when it found a way to distance itself from Yahoo and Microsoft. As a result, it is a company that has been generating enormous cash flows for the last (nearly) 20 years.
Peter Thiel also has an unconventional way of looking at competition. He believes that capitalism and competition are not synonyms, but antonyms- a capitalist being someone who is in the business of accumulating capital, while a world of perfect competition is a world where all the profits are competed away.
Without worrying about competition, you have the ability to focus on what is truly important, what will truly bring value to your company and the problem that you are solving.
Start A Company To Solve An Important Problem
“Saying that you want to be an entrepreneur is sort of like saying I want to be rich or I want to be famous… nobody in their right mind starts a company for the sake of starting a company.”
Don’t try to be a fake entrepreneur. Start a company because there is a very important problem to solve that is not getting solved. Solving this problem is why you actually need to start a company, don’t just start a company for the sake of starting a company. It is also extremely important to know the “why” of your company. You need to know the reason why you are starting the company in the first place, and it should be something that is not only important to the world, but important to you as well.
You have to find something that you are intrinsically interested in and develop your passion for solving the problem. You need to fall in love with the problem, not the solution. This way, when you encounter obstacles, you know exactly why you need to overcome them and have the determination to accomplish your goals. If you are not naturally curious about the problem that you are solving, then it will be easy to just quit and give up on solving the problem.
Value Substance, Not Status
It is also important to value substance over status. If you find what you are naturally curious and passionate about, then you should pursue it without caring about what other people think.
“I had taken too many of these shortcuts of valuing what was prestigious, what was conventional, over what I really wanted to do.”
To make sure that you are always following what you are interested in and that you are not just following what goals other people have imposed upon you, ask a lot more questions about why you are doing these things.
We have all been influenced by people throughout our lives, whether it be family, friends, teachers or even just society in general, and this has made an impact on our life choices. If you are honest with yourself, a lot of decisions you have made have most likely been for the sake of prestige and status, perhaps without you even realizing it at the time. Now, when you take a step back and reflect on these decisions, question your reasoning behind them and ask yourself:
- how did I end up here?
- why did I make that decision?
- what outside factors could have influenced that decision- is this what I truly want or am I just following what others have told me to do?
Don’t be complacent. Don’t just go along with the herd. You need to find your own path, one that you want to follow, even if everyone else is taking a different turn.
Competition Is For Losers
There is a common belief that competition motivates and encourages people to perform better. While Peter Thiel acknowledges these factors, he believes that taken to the extreme, competition can actually be a barrier to success.
“All happy companies are different because they figured out some way to radically differentiate themselves and escape from competition. All unhappy companies are alike because they fail to escape the essential sameness that is competition.”
Don’t lose sight of what is valuable. If you are competing ferociously, you will get better at that which you are competing on, but you will narrow your focus to beating the people around you. This often comes at a very high price of losing sight of what is more important and valuable.
Peter Thiel also says that with a lot of competition, there is this very tiny door that everyone is trying to rush through, while around the corner there might be this vast and secret gate that no one else is taking. You should always take this secret path and separate yourself from the crowd.
- Don’t be complacent; find one thing that you can do uniquely well and pursue it
- The entrepreneurs bringing something totally unique to the table are the ones that succeed in the long run
- Build monopolies and avoid competition
- Do not start a company for the sake of starting a company; find an important problem to solve and go from there
- Substance > status/prestige; don’t value what is prestigious and conventional over what you really want to do