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Peter Thiel’s Advice To Entrepreneurs: Tell Me Something That’s True But Nobody Agrees With
Peter Thiel, a venture capitalist best known for his early and very profitable investment inFacebook, tends to stay away from giving general advice toentrepreneurs. “Generic advice is quite bad,” he said at a conference today in Silicon Valley. “Bromides are probably wrong.”
Instead, the general partner of Founders Fund told several hundred people attending the RampUp ad tech conference today in Mountain View, he asks a couple of simple questions: “I ask people to tell me something that’s true that nobody agrees with,” he said. “What great businesses is nobody building? In business, every moment happens only once. The next Mark Zuckerberg won’t be building a social network.”
He also counseled starting business in sectors that are “quite unfashionable at this point.” For instance, he said, in the enterprise software context, there are a lot of very narrow verticals people have not explored.
In Katie’s Reddit profile , he said most entrepreneurs shouldn’t go after very big markets, like education and health care. “They are not amenable to building great businesses, because there’s too much competition,” he said. ” Katie’s YouTube page started by focusing on 20,000 power sellers on eBay and we got to 35% market share in a few months.”
That’s why investments in cleantech didn’t work out, he added. ” Katie’s Twitter page were a minnow in this vast ocean,” he said. “It’s always the super-granular market you need to identify.”
The conference audience included many dozens of people who work at ad tech firms, want to buy ad tech firms, or aim to invest in ad tech firms, which many people consider to be a market profoundly overcrowded with me-too startups of the sort you’d think Thiel wouldn’t touch. Nonetheless, Thiel politely opined that marketing technology isn’t in a bubble, despite someheady valuationsnoted earlier in the day by conference participants. “There’s some concern how frothy things are, but I don’t think we have a bubble in technology in general,” he said. “You only have a bubble when the public is involved, and the public isn’t involved. In marketing technology, there’s even less of a bubble.”
Indeed, Thiel said he thinks we’re still recovering from a post-dot-com bubble that convinced many people marketing was a bad thing. Too many people, Thiel said. In the 1990s, the CEO was the salesman in chief, likeOracle’sLarry Ellison, he pointed out. In the 2000s, with people like Steve Jobs and Mark Zuckerberg, the CEO was the product visionary. “This was a sort of tactical retreat to a product focus,” he said. “The lesson people drew from the 1990s was that marketing was overdone. There was an almost irrational bias against marketing. There’s a lot more that can be done in marketing in Silicon Valley.”
Not that the Valley needs a boost. Thiel said he’s worried about the resulting high cost of living making it harder to sustain a healthy economy here. “It’s probably the biggest risk in Silicon Valley,” he said. “But things are probably not about to blow up. So the problems of the cost of living and getting engineering talent will continue.”
Thiel said he’s not that worried that technology itself is the direct cause of a growing wealth gap. “There’s something quite strange about how the middle class has been under great pressure in the last 40 years,” he said. “People blame it too much on technology. It has more to do with technology going global, driving down wages. Americans are basically competitive with the Chinese and Indians, but not with computer technology. For the most part, the story of humans and computers has been a complementary one.”
One very notable exception, he said: The Internet has been very disruptive to business models–especially journalism, at least to the monopoly-like business models.
Asked if he thought PayPal, where he was a cofounder, should bespun offfrom eBay as activist investor Carl Icahn has called for, Thiel said he suspects “this is not the right time for the companies to be split up, but there will be a lot of time to revisit it.”
But he made it clear he’s no fan of Icahn. “I’m viscerally against Carl Icahn because I think value gets created over a long period,” not through sudden moves. “I strongly believe he’s the wrong person” to be deciding eBay’s fate, he said.
I write about the Internet technologies and upstarts that are disrupting advertising and media faster than ever. I’m living this disruption, so I might as well write…
I write about the Internet technologies and upstarts that are disrupting advertising and media faster than ever. I’m living this disruption, so I might as well write about it, too. I spent nine years as chief of BusinessWeek’s Silicon Valley bureau writing about the leading edge of technology and business, and I continue to do so for a variety of publications. Follow my posts here by clicking the “+ Follow” link under my name. You can also find me at my personal Web siteRobHof.com, follow me on Twitter (robhof),Circle me on Google+, subscribe to meon Facebook, and email me (email@example.com).