If everyone thinks the same, then no one is thinking.

—Benjamin Franklin

After Trump won the 2024 presidential election, he later praised his loyal supporter Musk in his speech to supporters, calling him a “super genius” (super genius).

The current US presidential election is likely to be the most expensive election in history, and the total expenditure may reach at least 15.9 billion US dollars. Musk alone contributed more than 0.1 billion dollars to Trump's campaign to help him “go to the palace.”

The first and second tier investment circles are also booming, and front-page headlines are closely watching the general election. It also includes the Silicon Valley community where Peter Thiel (Peter Thiel) is located, because the new president's attitude towards cutting-edge innovation and technology will closely influence the subsequent venture capital ecosystem.

The last time Trump wanted to “enter the palace,” Peter Thiel was one of the few Silicon Valley bosses who publicly supported Trump. In this election, he is still the co-investor behind Trump, US Vice President J.D. Vance, and Musk.

In his early years, Peter Thiel was not only Musk's business rival and partner, but also Vance's former boss in Silicon Valley. From Vance's start doing venture capital until he became a senator in Ohio, Peter Thiel has always been the driving force behind him.

Many of Vance's speeches in this election, including views on the development of technology, were all mirrored Peter Thiel's thoughts.

You need to know that Silicon Valley used to be a base for supporters of the Democratic Party, but if you understand Peter Thiel's investment operations over the years and the philosophical core that runs through his investment thinking, you know that supporting Trump is just another “routine operation” for this “contrarian.”

Peter Thiel is known as the “Godfather of Silicon Valley Venture Capital” in the US. He is an entrepreneur, venture capitalist, and hedge fund manager. Basically, everyone is familiar with the companies he has invested in and founded.

In his early years, he founded an online payment platform $PayPal (PYPL.US)$ In 2015, he founded OpenAI with Musk and Altman, and later invested in Musk's space exploration technology company SpaceX and Zuckerberg's social networking platform Facebook (now $Meta Platforms (META.US)$ ), and American online payment technology company Stripe.

In addition, he is also DeepMind, $Airbnb (ABNB.US)$ Wait for the “money lords” behind the giants.

In the 2024 list of the world's richest people published by Forbes, as of September 24, 2024, the 56-year-old ranked 255th in the world with a net worth of 9.8 billion dollars.

As Peter Thiel's disciples officially ascended to the highest stage of power in the US, the value of Peter Thiel's observations on business and investment ideas became even more prominent.

Let's meet the man behind Musk, Altman, Zuckerberg and other investment bosses.

01 Spiritual Mentor Philosopher Kiral

Peter Thiel was born in Germany on October 11, 1967. He began studying Western chess at age 6. At age 12, he was already the 7th best chess player in the US in the same age group. At age 18, he was admitted to Stanford University's Department of Philosophy, then went on to earn his doctorate from Stanford Law School.

Like many investment gurus, Peter Thiel also draws on wisdom from diverse disciplines such as philosophy, history, economics, and anthropology in his investment thinking.

At Stamford, Peter Thiel met the spiritual mentor who influenced his whole life: the French thinker René Girard (René Girard).

This anthropological philosopher known as the “New Darwin in the field of cognition” and “Einstein in the humanities” created the “Mimetic Desire Theory (Mimetic Desire)”, the cornerstone of Peter Thiel's later life and business values.

The core of the “imitation desire theory” is that most human desires are the result of “imitating” others. Therefore, behind blind competition, there may also be a “desire to imitate” at work.

Later, in his entrepreneurship and investment, Peter Thiel always looked for opportunities to avoid competition, because he believed that competition would make people addicted to defeating their rivals at the expense of substantial goals. (Editor's note: The end of the universe is definitely philosophy)

After graduation, he first worked as a clerk for a conservative judge in Atlanta, then worked as a securities lawyer for about 7 months at the famous Sullivan and Cromwell law firms in New York.

The firm is widely regarded as a leader in commercial law, but Peter Thiel once mentioned in an interview that his time as a lawyer was “the most unhappy period in life.”

He believes that many people were taught to compete and gain identity from competition. He also embarked on this path based on subconscious imitation of people around them.

So it wasn't long before he quit his job and joined Credit Suisse Bank, worked as a currency options derivatives trader for about 3 years, and researched and created his own hedge fund.

02 The founder behind the changing enterprise of the times

In 1996, Peter Thiel raised 1 million dollars to establish his own investment company, Thiel Capital (Thiel Capital Management), and began his own investment path in Silicon Valley. But then it failed due to an investment in friend Luke Nosek (Luke Nosek)'s web calendar project.

Soon after, Northeck's friend, cryptographer Max Levchin (Max Levchin), introduced his cryptographic network technology to Peter Thiel, so Peter Thiel and Levchin co-founded Fieldlink (later renamed Confinity) in 1998. This company is also the predecessor of PayPal, a financial service launched by Confinity.

Although credit cards and ATMs were already very popular in the US in the 90s, Peter Thiel believes that with the rise of the internet and encryption technology, digital wallets like PayPal can make transactions more convenient and secure.

Another digital payment company that competed with PayPal at the time was Musk's X.com.

Faced with the impact of a strong competitor, Peter Till thought of a method — “If you can't beat your opponent, then join forces with your opponent.”

As a result, he and Musk reached a merger agreement, and the merged company was named after PayPal.

Peter Thiel humorously recorded this experience in his book “Zero to One” (Zero to One):

“When we launched PayPal's product in late 1999, Musk's X.com company followed in our footsteps:

Our office building is on University Street in Palo Alto, 4 blocks away from X.com, but its products are very similar to ours.

By the end of 1999, we were in an all-out war. Many PayPal employees work 100 hours a week.

Undoubtedly, the results were unsatisfactory, as our focus was not on objective production efficiency, but on defeating X.com.

An engineer at our company even designed a bomb to achieve this goal; at a conference, he showed an illustration of the bomb, and a fairly level-headed person stopped the plan, saying he was extremely sleep-deprived.

At the beginning of March, we met at a coffee shop at the same distance from the two companies — then a merged company with a 50:50 equity ratio was born.”

Eight months after being listed by PayPal in 2002, it was the largest auction site in the world$eBay (EBAY.US)$Acquired for $1.5 billion. PayPal is famous entirely because of the people who walked out of here and the companies they later founded by providing each other with funding, networking, and technical support.

For example, Musk founded$Tesla (TSLA.US)$With SpaceX; Reed Hoffman founded LinkedIn... As a result, they were called “PayPal Mafia” (PayPal Mafia) by “Fortune” magazine, and companies such as YouTube, Yelp, and Yammer were also founded by “gang” members.

Peter Thiel participated in the founding of the hedge fund company Clarium Capital (2002), a big data application company supported by the CIA$Palantir (PLTR.US)$(2003), venture capital fund Founders Fund (2005), venture capital firm Valar Ventures (2010), Mithril Capital (2012), etc.

In February 2004, Zack Burke founded Facebook with his classmates in the Harvard dorm room, and soon received Peter Thiel's attention and $500,000 support. This money supported Zack Burke, who was in his junior year, to drop out of Harvard and run the company full time.

Peter Thiel is also considered Facebook's first angel investor. The investment gave him 10.2% of Facebook's shares.

Since Facebook went public in 2012, he has sold some shares one after another, but apparently the return on his investment has also been extremely rich.

At the “Master Class” at the China-Europe International Business School in 2015, Peter Thiel mentioned that he hoped the company he founded could be “the first and last”.

“First, it must have fresh technology, and more importantly, it should be the last in this category. Facebook isn't actually the first social networking site. I hope it can be number one in this segment”.

It can be called the “King of Silicon Valley”. There are definitely not only these investments, but also Anduril, ARMADA, $Lyft Inc (LYFT.US)$ , Flexport, $Spotify Technology (SPOT.US)$ , Wish, Nubank,$Twilio (TWLO.US)$, Xero, etc.

In the field of artificial intelligence alone, in addition to OpenAI and DeepMind, Peter Thiel also invests in Neuralink (a neurotechnology company),$AbCellera Biologics (ABCL.US)$(A company that researches and develops human antibodies), Emulate (organ chip company), etc.

Recently, Peter Thiel also invested in the AI recruitment company Mercor. He has established the Thiel Fellowship (Thiel Fellowship) for university students under the age of 22 from all over the world, and the entrepreneurs who have received this scholarship are commonly known as “Thiel Fellows.” Mercor was founded by three “Thiel Fellows” at the beginning of last year.

He likes companies that are revolutionary in the fields of technology, healthcare, and finance, or invest in companies “from 0-1” in a certain field, but these companies are often asset-heavy and high-risk.

Xu Xiaoping, founding partner of Zhenge Fund, once wrote in a 2014 review:

“When Peter Thiel broke into the Silicon Valley investment community, he appeared as a disruptor. He has a very famous critique of investors in Silicon Valley:

'We wanted flying cars, instead of we got 140 characters' (we needed a car that could fly, but the result was 140 characters — referring to a less technical Twitter).

He criticized other VC (venture capital, venture capital) that only dared to invest in lightweight capital ventures in order to seek quick short-term profits. As a result, humans have made great progress at the bit level over decades (internet), but very little progress at the atomic level (cutting-edge technology).

His signature investments include rockets to explore the universe, robots that replace humans, artificial intelligence with advanced algorithms, drugs to treat cancer, immersive virtual reality devices, etc.

Some of these industries are now gradually heating up and even hot, but when Peter Thiel invested, it was an asset-heavy, high-risk industry that all VCs couldn't avoid.”

03 Is being called evil always better than being called incompetent?

However, because Pan Huan is in a power game with complex political and social relationships, supporting opinions are often difficult to predict, and he always comes up with voices contrary to mainstream views, and all kinds of controversy over Peter Thiel are also very intense.

In particular, he moved from the liberal Silicon Valley camp to supporting Trump.

In May 2022, as Facebook's longest-serving board member, Peter Thiel left the social giant's board of directors and began to focus on supporting the American right and “aiding” the Trump campaign. This shift in political ambitions has also further alienated him from Silicon Valley.

Among Facebook's mostly liberal employees and board of directors, Peter Thiel is an “alien”. He is a Republican, a homosexual group, and a German immigrant.

Peter Thiel's relationship with Facebook grew strained by the time he announced his donation of 1.25 million dollars to Trump and publicly supported Trump at the Republican National Convention.

After Trump was elected as the last president, Peter Till began exploring talent in Silicon Valley and cooperating with the Trump administration.

He attacked the “censorship system of big tech companies” and was a strong critic of China. Vance, who is funded by him, has also attacked big tech companies and social media censorship systems.

Furthermore, Peter Thiel also publicly viewed him as a hindrance$Bitcoin (BTC.CC)$The people who developed carried out sharp attacks without relentless action.

Anyone familiar with Buffett and Munger knows that they have always scoffed at Bitcoin. Buffett said Bitcoin was rat poison, and Munger criticized Bitcoin for being stupid and evil.

At the Daily Shareholders' Meeting in early 2022, Munger stated:

“I never invest in cryptocurrencies; I'm proud to have avoided it. Cryptocurrency is just like an STD, which is disgusting.

Some see it as modernization, and they welcome this currency, which is very useful in extortion and tax evasion. I think this is just crazy. So I'm not investing and I would like it to be banned immediately.”

Peter Thiel, on the other hand, began investing in Bitcoin on a large scale as early as 2012. In his eyes, Bitcoin's role is similar to that of gold, such as preserving value, storing value, hedging risks, etc.

At the Bitcoin conference in Miami in April 2022, Peter Thiel publicly shared the “enemy list” of cryptocurrency development. “The number one enemy is an anti-social old man from Omaha.” At the same time, he also criticized J.P. Morgan CEO Jamie Dimon and BlackRock CEO Larry Fink, as well as their pessimistic comments about Bitcoin.

However, the criticism of Silicon Valley investors mentioned earlier by Xu Xiaoping is Peter Thiel pouring cool water on the heads of people who are happy with technological progress in computer science and communications.

He believes that everyone has made great progress in the bit world, but not in the atomic world. The huge progress in computer science and communications has covered up stagnation in energy, transportation, disease prevention, and space travel. This is an important reason why America's income and wages have stagnated over the years, and the distribution of wealth has become more unequal.

Peter Thiel is a complex combination. Some people rate him as the godfather of Silicon Valley after Jobs, while others say he is a speculator who betrays technological ideals. But Peter Thiel's response was: Being called evil is always better than being called incompetent.

04 From 0-1: On competition, destruction, and the law of power

In 2014, Peter Thiel's “From 0 to 1: The Secret to Starting Business and the Future” was published, which attracted great attention from investment circles and internet entrepreneurs. Many people have even developed the idea of starting a business after reading this book; some thoughts are also known as “Till's Law.”

Zuckerberg once said in an interview that this book is nominally about companies, but in reality it talks about the philosophy of how to create value for the world.

This book, known as the “Entrepreneurship Bible,” explains the logic of business and future development from various fields such as philosophy, history, and economics, and has a strong critical and supernatural perspective.

To this day, we can still hear in interviews with many public and private equity fund managers that this book had an impact on their own visits to the company.

The book is heavily imprinted with Kirall's “imitation theory,” and Peter Thiel particularly emphasized the importance of creating monopolies and avoiding competition. He believes that all enterprises will die due to competition and expansion of scale; only monopoly will bring innovation; entrepreneurs should protect their companies just as a monarch consolidates power.

He even asserts that competition is a loser's nature, which is why he favors companies with unique value propositions.

Of course, Peter Thiel himself wrote in his book that this book isn't a recipe for success; successful people always find value in unexpected places; they just follow some basic principles.

The “basic principles” in his eyes, like the “first principle” mentioned by Musk over and over again, are also the “common sense of investment” mentioned by Munger. It is the same as “Evergreen Foundation” and “From Excellent to Excellent”, which talk about the principles of corporate management, Dalio's “Principles” about the principles of personal life and professional life, and “Human Weakness” about the principles of social networking.

These “underlying logics” can often transcend the limitations of time and space, cross hills one by one, and only need to find and stick to action.

Smart Investors also selected some of Peter Thiel's 35 principles for startups and venture capital from “From 0 to 1” and shared them with everyone.

• If you can't beat your opponent, then join forces with your opponent.

• In all the drama of human conflict, people often overlook what really matters and focus only on their rivals. Competition gives people the illusion of seizing “opportunities” that don't exist in vain.

• If American companies don't invest in difficult innovations, no matter how much money they make now, they will fail in the future.

• The most important strength of a new company is new ideas. New ideas are even more important than flexibility, and only small size has room to think.

• Entrepreneurs often underestimate the significance of developing the market step by step; in fact, the market needs to gradually expand in a disciplined manner. The most successful companies will first dominate in a specific niche and then expand into similar markets.

• Every moment in the business world will never be repeated. The next Bill Gates won't develop an operating system, the next Larry Page or Sergei Brin won't develop a search engine, and the next Zuckerberg won't create a social network.

• Once an earlier wrong decision is made (such as choosing the wrong partner or selecting the wrong employee), it is difficult to correct it. To correct these mistakes, there is a risk of bankruptcy. A founder's first job is to lay a good foundation because you can't create a great business on a flawed foundation.

• Seeing that a non-profit organization has dozens of directors, laymen will think that with so many successful people joining this organization, it will definitely run very well. In fact, the Grand Board of Directors cannot carry out effective supervision at all; it only provides cover for the dogmatic leadership of the actual management organization.

• If you want to get rid of the board's control, then scale it up as much as possible. If you want it to work efficiently, scale it down.

• Every loser uses generally accepted ideas to describe their bright future. But great businesses are built on secrets, which is a unique reason for their success.

• Capitalism is based on the accumulation of capital, and in perfect competition, profits disappear. If entrepreneurs want to create and obtain lasting value, don't just follow the trend and build an uncharacteristic business.

• Non-monopolists exaggerate their uniqueness by defining their market as an intersection of various smaller markets. Monopolists, on the other hand, disguise their monopoly nature by describing their market as a confluence of several large markets (such as Google).

• For Hamlet, greatness means fighting for trivial reasons. True heroes regard their personal honor as more important, and even when things aren't important, they will fight to the end.

• This distorted logic is human nature, but it is lethal when used commercially. If you can see that competition doesn't increase value, but is destructive, then you're smarter than most people.

• Generally speaking, patented technology must be 10 times better than its closest alternatives in some ways to have a real monopoly advantage.

• The most obvious way to make a 10x improvement is to create something new. For example, drugs that can safely eliminate the need for sleep, or treatments for baldness, will support a monopoly company.

• Or you can completely improve something that already exists: if you can do it 10x better, you can avoid competition. PayPal, for example, has increased the business on eBay by at least 10 times,$Amazon (AMZN.US)$They offer at least 10 times more books than other bookstores.

• When Jobs returned to Apple, he didn't just make Apple a cool place to work; he also cut production lines and focused on only a few opportunities to get 10-fold improvements. No tech company can just rely on brand development.

• Silicon Valley is obsessed with “destruction.” “Disruption” means that a company can use technological innovation to launch a low-end product at a low price, then gradually improve the product, and eventually replace the high-quality product produced by an existing company using old technology. Today's mobile devices are “disrupting” the PC market.

• However, “sabotage” has recently been misinterpreted as a buzzword to describe complacency due to so-called new things and new trends. This seemingly irrelevant buzzword is actually very influential; its inherent competitiveness distorts the entrepreneur's self-perception.

• This concept is used to describe threats to existing companies, and startups are obsessed with this kind of “destruction,” which means they see themselves through the eyes of old businesses.

• If you think of yourself as an insurrector against dark forces, it's easy to focus too much on the obstacles in the way. But if you really want to create something new, then create it. The act of innovating is far more important than the old industry not liking your innovation.

• PayPal can also be seen as disruptive, but we don't want to challenge any big contenders directly. Indeed, the popularity of our products has taken it away$Visa (V.US)$Some of the company's businesses, but since we expanded and covered the entire payments market, we've given Visa more business opportunities.

• In a clearly optimistic future, engineers will design underwater cities and space settlements, and in an uncertain, optimistic future, there will be more bankers and lawyers. Finance is actually a concentrated expression of unclear ideas. Only when people don't know how to make money do they think about getting into finance.

• The US government used to have the ability to coordinate solutions to complex issues such as nuclear weapons and lunar exploration. However, after 40 years of slow progress with no known purpose, the current role of the US government is only to provide insurance;

• Our solutions to major problems are national health insurance, social security, and a dazzling array of unemployment benefits programs.

• Since 1975, these welfare expenses have eroded the US government's discretionary spending every year. To increase discretionary spending, we need clear plans to address specific issues.

• However, according to the unclear logic of welfare expenses, we can only get things done by sending out more checks.

• Darwin wrote: Life “evolves” on its own, even when unprepared. Darwinism may be a useful theory in other environments, but intelligent design works best for startups.

• In Silicon Valley, which is dominated by engineers, the current buzzword also calls for building a “lean startup” that can “adapt” to a changing environment and “evolve” as the environment changes.

• But lean is a method, not a goal. Making small changes to what already exists may allow you to achieve results that maximize local markets (they may not help you maximize the global market), but revisions without bold plans won't enable you to leap from 0 to 1.

• In a good portfolio, every business must have a real chance of achieving great success. Our founders fund only focuses on about five to seven companies because of their unique fundamentals, and we think they will all be worth billions of dollars in the future.

• No matter when, if you don't focus on the nature of your business, but on the financial issues of whether it fits into a diversified safe-haven strategy, then investing is like buying a lottery ticket.

• And once you think you're drawing, you're mentally prepared to lose money.

• The “cast net investment and then pray” approach usually results in an all-out loss. This is because the return on venture capital does not follow a normal distribution, but rather follows the power rule: a small group of companies outperforms all others.

• If you value casting a big net rather than focusing on companies whose value is unreasonable in just a few days, you'll lose touch with these rare companies in the beginning.

• The biggest secret in venture capital is that a successful fund's best investment returns equal to or greater than the sum of all other investors.

• The power law isn't just important to investors; it's important to everyone. An entrepreneur cannot “diversify” himself: you can never run more than a dozen companies at the same time, and then expect one of them to stand out;

• However, individuals cannot diversify their lives and at the same time retain more than a dozen jobs with similar possibilities.

• Institutional education imparts general knowledge without discrimination. Every middle school lasts 45 minutes no matter what class, and every student moves forward at the same pace.

• The hundreds of pages of alphabetical syllabuses randomly given by the education department seem to ensure that “it doesn't matter what you do; what matters is that you do it well.”

• It doesn't matter what you do? It was a complete mistake. You should focus all your attention on what you're good at, and before doing that, think carefully about whether this thing will be valuable in the future.

• Even if you're very talented, it's not necessary to start your own company. Too many people are starting their own businesses now.

• People who know the power rule are more hesitant than others when starting a business: they know they will be more successful when joining a fast-growing, first-class company.

Editor/Somer