I’ve known Peter Thiel since we were undergrads at Stanford, when the most common phrase either of us used in our conversations was “How can you possibly believe that?” Yet despite disagreeing on so many topics and in so many ways, we made a great team — whether I was helping Peter build PayPal, or investing in Facebook together. That’s because we agree on a small number of really big things. In this week’s Masters of Scale podcast, Peter joined me to talk about one of those key areas of agreement: the importance of escaping your competition.
Peter grew up as a fierce competitor, but after competing his way to the top of his well-educated peer group and joining a white-shoe law firm, he discovered that he and his co-workers were miserable. That’s when he realized that, in his exact words, “Competition is for losers.” The path to real success is not to compete, but to invent a new game, and then master it.
You’ll learn the exact mathematical formula behind PayPal’s success, which Peter still uses to make investing decisions. This is the same formula that allowed Peter to conclude that PayPal would be able to escape the competition (when the company still had only 24 users) also convinced us to invest in Facebook — even though Mark Zuckerberg’s pitch was lackluster. Fortunately, the service was amazing and Mark was clearly very smart.
You’ll also hear some very different perspectives on escaping the competition, from the mindset that allows two-time Olympic gold medalist Natasha Hastings and her trainer Darryl Woodson to get ahead of her fellow sprinters, to the strategy that helps Wall Street banker-turned-baker Umber Ahmad separate her Mah-Ze-Dahr bakery from its more-famous artisanal rivals.
As always, I’d like to hear your thoughts and reactions to this episode. How can you define your market so you’re escaping the competition, rather than just beating them (like a loser)?
Please write a short post on your LinkedIn newsfeed to share your answers with the wider community. Tag your post #mastersofscale so I can find it. And if you’d like, Tweet it at me (@ReidHoffman) and @MastersOfScale.