Peter Thiel: What This Daring Entrepreneur Can Teach Us
“Success leaves clues.”
This was a quote I heard years ago and has stayed with me since. As they say, a smart man learns from his own mistakes; a wise man learns from the mistakes of others
So that’s why the subject of today’s post is Peter Thiel, one of the most successful entrepreneurs in the world, and what we can learn from him.
You may have heard of Thiel; he was a founding member of PayPal and the first outside investor in Facebook. As you can imagine, these ventures made Thiel a very wealthy man. As of July 2016, he has an estimated net worth of $2.7 billion at 48 years old.
Thiel has released a best-selling book Zero to One: Notes on Startups, or How to Build the Future in which he also spells out his business philosophy and the lessons he has learnt over the years.
Thiel has also been famous, or rather infamous for some of his more political and personal choices, such as his staunch support of Donald Trump’s presidency as well as some other issues that won’t be mentioned. All of this is irrelevant, because regardless of your personal opinion of Thiel, you can still learn something from him.
As the great Bruce Lee said, “Absorb what is useful, discard what is not”.
Six Business Lessons We Can Learn From Peter Thiel
Lesson #1: Don’t Be a Copycat
Thiel stresses originality as one of the key factors to success. He notes that too many people are trying to ‘recreate Google’, and identifies it as a key cause of business failure. Thiel candidly says that the ‘next Mark Zuckerberg’ won’t be building a social network.
“All of the great innovations in business and technology happen once,” Thiel says in his book. Companies like Facebook, eBay, and Airbnb are the dominant leaders in their niche, and no one is going to dethrone them anytime soon. Better to look elsewhere.
And while this advice might seem to be directed more at those looking to start the next landscape changing business, this doesn’t mean it can’t apply to you too. You see, while Thiel is speaking on the grander scale of ‘great innovations’, you can apply his advice on a smaller scale.
What skills do you have that separate you from the pack? It may not be any one skill, but a unique combination of various skills that can lead to an original idea. And when you’ve identified your niche, you can then work on dominating it, which leads to the second lesson.
Lesson #2: Be a Monopoly
The word monopoly has always had a bad reputation. From the early days of the 20th century, when US President Teddy Roosevelt took on the monopolistic trusts such as Rockefeller’s Standard Oil Company, to the more current cases of Microsoft and Google, monopolies have been universally considered ‘bad’.
Further, in our capitalistic world, the benefits and importance of competition is constantly preached. Competition makes us stronger, they say, and is also good for the public. But Thiel strongly disagrees, saying that entrepreneurs who enter into highly competitive markets find their profits eaten up by their rivals.
“The goal of every entrepreneur who starts a company is to create and build a new monopoly,” Thiel says. “If you want to have a successful company, you should have a monopoly.” Google, for example, is definitely a search engine monopoly; no matter what the official company line is.
How does this apply to you? Again, being a monopoly does not necessarily mean being a giant global conglomerate. Rather, you can be an effective monopoly by dominating your niche no matter how small it is. For instance, your niche might be being a garage door repairman in a small suburban town; hardly a large market. But if you’re the best at it, you’ll still be doing well.
Lesson #3: Start Small but Think Big
The third lesson connects to the second lesson. Focus on the small markets and look to dominate it entirely. Too often, Thiel says, entrepreneurs are drawn to the lure of large and established markets.
Thiel quotes in his book, “As an investor, it’s always a red flag when entrepreneurs talk about getting 1% of a $100 billion market. It’s easier to dominate a small market than a large one.”
This ties in to the idea of becoming a monopoly in your niche market. Remember, your market doesn’t have to be huge for you to be successful. As long as you can dominate your niche market, you’ll do fine. Plus, you can always expand from there.
Take a look at Amazon; Jeff Bezos wanted to dominate the entire online retail market, but in the beginning focused on dominating the online book market first. From a humble online bookstore, Amazon has now been cited as the cause of the closure of countless brick and mortar stores. Facebook started as an online Harvard yearbook and now is the most dominant social network of our time.
Lesson #4: Be Bold
After the dot-com crash, many entrepreneurs and investors adopted a highly cautious mentality. One key feature of said mentality was only making small incremental advances. Thiel lampoons this conservative mindset and says that it’s far better to ‘risk boldness than triviality’.
Of course, this doesn’t mean throwing caution to the wind. Boldness does not mean being foolhardy. But no one ever achieved great things by playing safe all the time. Everything in life, especially success, involves risk. And as the saying goes “Fortune favors the bold”.
Lesson #5: Sales Matter Just As Much as the Product
Another remnant of the post dot-com conservative mentality that Thiel lambasts is the excessive focus of product over sales. Too often, he notes that companies keep trying to build the perfect product, going off the mantra that ‘if you build it, they will come’.
That is false; you can build one of the greatest products or offer one of the greatest services ever but if no one knows about it, nobody will come. Thiel emphasizes that sales and marketing are just as important as the product.
This is even more important if you are an entrepreneur or small business owner. And even if you’re in the corporate world, it is no less important to market your own skills in order to move up the ladder. Whether you agree with this mindset or not is irrelevant; it is simply the way the world works.
Lesson #6: Think Long Term
As attention spans shrink all over the globe, so do our goal horizons. Too many people have a ‘live for the moment’ mentality, aptly summed up by the obnoxious cry of YOLO. Well, Peter Thiel has an equally catchy saying for his mindset, “Remember the future”.
In a more pragmatic sense, Thiel asks you to ask yourself the question “Will this business still be around a decade from now?”. In this context, he was speaking from the perspective of a venture capitalist, but it is a question you should be asking yourself when looking to venture into a business.
Learn from Peter Thiel; Don’t Copy Him.
When studying the lives and careers of people like Peter Thiel, it is important to remember that at the end of the day, he is still only human. He is not perfect; he has made mistakes and will continue to make them in the future.
So we should not strive to be the next Peter Thiel; not only is that impossible, it is also not what’s best for us. What’s best for us is to maximize our God-given potential; to become the absolute best versions of ourselves possible. Learn from Peter Thiel, but don’t try to be a copycat.