Entrepreneurs succeed when they create markets,
PayPal founder Peter Thiel tells overflow audience at Booth
“What is true that no one agrees with you about?” asked PayPal founder Peter Thiel of an overflow audience at Harper Center on October 15. “That is a much harder question to answer than people first realize.” But it is one of the essential questions to answer, he explained, if you want to make it as an entrepreneur.
Thiel shared highlights from his new book on entrepreneurship, Zero to One, and answered questions at an event organized by the Polsky Center for Entrepreneurship and Innovation. Tickets for his appearance sold out in hours, with more than 860 people registering early and 120 joining the wait list—underscoring the growing interest in the subject by Booth students as well as university undergraduates.
Attendees were drawn by Thiel’s track record—the entrepreneur and tech investor launched PayPal in 1998 and went on to make early investments in Facebook, LinkedIn, Yelp, and dozens of other successful technology start-ups.
He also is a cofounder of computer software and services company Palantir Technologies.
In a talk moderated by Randall Kroszner, Norman R. Bobins Professor of Economics, Thiel offered three truths that he believes are key to entrepreneurial success.
First, the venture capitalist and hedge fund manager emphasized that uniqueness is an absolute necessity. He said most entrepreneurs focus on competition, not innovation. But the truly gifted entrepreneur will not compete, she will develop in a completely new area with no rivals. “Go for the monopoly,” Thiel said. “Do something that no one else is doing.”
Thiel’s second truth is that there is a lot of innovation still to be made in many fields and that believing there are new horizons to conquer is key to entrepreneurship. “Today there are a lot of people who think that the frontier is far and that you have to be super brilliant to figure out anything new.” But that thinking is self-defeating.
According to Thiel, three kinds of information exist in any field: conventional truths, secrets, and mysteries. Conventional truths make up most of the existing field, while mysteries are things that can never be known. In between are secrets: facts that can be known but have to be figured out. This is where entrepreneurs need to look to figure out something in the field that no one else has yet determined. “There are lots and lots of secrets out there,” Thiel said. “Don’t assume all the secrets have been exposed.”
While setting out in to create a new currency, Thiel instead created a new way in 1998 to take and make payments. PayPal revolutionized online commerce, because he had figured out something in an existing field that no one else had yet deciphered.
Thiel’s third point: The developed world still has room to grow. “Look for ways to develop the developed world,” he said, urging entrepreneurs to find a way to improve lives, to improve the world.
“Being an entrepreneur is not something that can be broken down into steps, it can’t be made completely scientific,” Thiel said. “To be truly successful you have to be unique, you have to be one of a kind.”
Thiel’s points resound with the Polsky Center’s mission as the foremost resource for University of Chicago students and alumni pursuing entrepreneurial endeavors and private equity careers. The center’s activities include academics, research, conferences, global and community outreach, and competitions such as the yearly Edward L. Kaplan, ’71, New Venture Challenge business launch program. The program also was sponsored by the Stigler Center for the Study of the Economy and the State, the Social Enterprise Initiative, the Chicago Innovation Exchange and UChicago Careers in Entrepreneurship.—Robin Mordfin