Paypal co-founder Peter Thiel talks about the insights on building the future that he gained as an entrepreneur and investor. See the full story:  http://knlg.net/Z1iPGs

We're here with Peter Thiel, co-founder and CEO of PayPal, the first outside investor in Facebook, as well as a legendary investor and entrepreneur in Silicon Valley.

He's the author of 0 to 1, an extraordinary new book, and we're thrilled to find out, for starters, Peter, why is competition for losers?

Well, this was the headline of the Wall Street Journal excerpt of our book.

The chapter title in the book itself said, all happy companies are different.

So it was a slightly milder form of that.

But it was this provocative idea because we always think competition is for winners, and a winner is someone who's better at competing, is more intense at competing.

It's like you're in a high school sports team, and you learn to compete against the people you're up against, and the really talented people are the ones who compete the best.

But what happens when you compete is you always just are focusing on the people around you, on what people are already doing, what's deemed valuable by other people.

And you often lose sight of building things that are 1 of a kind, different, truly valuable.

And 0 to 1 companies are companies that have not been built before.

The next Bill Gates will not start an operating system.

The next Larry Page won't start a search engine.

The next Mark Zuckerberg won't start a social networking company.

If you're copying these people, you're not learning from them.

If you're competing against these people, if you think you're competing with these people, you're actually trying to copy them.

And again, you're not learning from them.

So on the flip side of that, then, you argue we should actually think about monopoly as

Well, it is certainly from the point of view of a founder or entrepreneur, you want your company to always be a monopoly.

You want to be offering something to the world that no 1 else is offering and that therefore you'll have some really healthy profit margins around your business.

So from the inside I would argue monopoly is always a good thing and that's what every entrepreneur should attempt to build.

From the point of view of society as a whole I think monopolies deserve their bad reputation when things are static.

So it's like the Parker Brothers board game where you're just reshuffling the deeds or it's like the post office or something like that where the monopoly is just a rent collector or a toll collector.

But when it's something dynamic like Apple computer building the first smartphone that worked and you have people lining up around the block to buy it.

That's a monopoly that does not create artificial scarcity, but that's creating something new and that's doing something that's good for society as well.

So if you put these ideas together, is the suggestion then that Mark Zuckerberg shouldn't have started Facebook given that Friendster and MySpace were already out there or that Larry and Sergey had Alta Vista and asked Jeeves and others to compete with.

Well, it's always, it certainly is always a question what, you know, what dimension is really new and really different.

I would argue that with Google and the search business, it was the page rank algorithm, it was a way to automate search and computerize it that was quite new and that fundamentally transformed search into this vastly bigger space than anyone had thought it was in the 90s, in the pre-Google 90s.

And in a similar way, I would say Facebook was the first 1 to really crack the code on making personal identity real.

And 1 of my friends, Reid Hoffman, went on to start LinkedIn in the 90s and started a company called Social Net.

So they already had social and networking in the name.

And their model was that we'd have these avatars on the internet, and maybe I'd be a dog and you'd be a cat.

And then we have these questions, how would we get along with each other?

And so there were all these virtual world simulated reality social networking plays, but they were fundamentally about people being different from who they really were.

Facebook was the first 1 to really capture real identity.

So Sometimes companies are iterations on things where there's just a fundamental breakthrough in 1 really key dimension.

bit about why you think software has been so lucrative and why have we seen so much progress in digital technology recently?

Well, there's sort of a lot of reasons for this, but this certainly has been the last 40, 50 years we've had enormous innovation in the world of bits, somewhat less in the world of atoms, clean tech, energy more generally, transportation, biomedical, a lot of these other areas seem to have been a lot tougher.

1 of the things that I think is true of any great company is you have to build something that is valuable to the world and you have to capture some fraction of what you create.

So you have to create X dollars in value and you have to get Y percent of X.

And X and Y are these totally independent variables.

And this is actually a disturbing element in the history of innovation that a lot of innovators discovered things but weren't able to get anything.

Tesla was out-competed by Edison, even though Edison had an inferior technology.

Or the Wright brothers came up with the first airplane, but they didn't get to be rich.

And of course in the sciences, it tends to be even worse.

So If you're Einstein, you come up with general relativity.

You don't get to be a billionaire, you don't even get to be a millionaire.

And so there is something, so it's always this question of how do you actually capture some of the value of what you create.

I think there is something very unusual about software businesses, where so many of them have this monopoly-like character that enables people to capture a tremendous amount of value.

And I think that's sort of this very underexplored dimension of it.

The marginal cost of producing software is 0, so you have these incredible economies of scale, and that's sort of a classic monopoly, natural monopoly business.

It makes me wonder what's going to come next.

So if you think 20, 30, 50 years down the road, is there going to be a next digital revolution and where will that be?

Well, I think it's a safe, it's a fairly safe bet that the digital revolution just keeps going.

You know, it's been going for 40, 50 years.

The contexts have gradually shifted from, you know, hardware, semiconductors, to software, internet, mobile internet.

And so I think, but I think in this space broadly is a very good place to look.

And while we've constantly explored looking at all sorts of other technological verticals, space, biotech, genomics, energy, The bulk of our focus is still on software for this reason.

So let's talk about the people behind the software.

1 of my favorite lines in 0 to 1 was that you didn't really trust a tech CEO wearing a suit.

Well, it was in the context of a lot of the clean tech companies in the 90s where you had these sort of people who had a certain look to them and it sort of looked, and again it's always fact specific, there are no hard and fast sartorial rules, but in Silicon Valley if you were wearing a suit it looked like in a pitch meeting, it looked like you were bad at sales and worse at tech.

And so it had sort of that very specific meaning.

So you wouldn't make the broader statement that we should just leave suits out of business altogether?

So these things are always, always very context specific.

I think they're definitely 1 of the people rules that I find to be very true is that these companies often work well if the people have known each other for a long time or there's some good prehistory.

So whenever I talk to people who founded a company, I often like to ask the prehistory question.

How long have you been working before you started the company?

A bad answer is we met at a networking event a week ago and we started a company because we both want to be entrepreneurs.

And a good answer is we were in college together for 4 or 5 years working on this, thinking about this, and I'm more on the business side and the other person's more on the tech side or something like that.

And this was 1 of the secrets behind the PayPal mafia that you were a part of.

Did you know back then that it was so critical to start a company with people that you knew well and trusted?

Well, I don't think you need to know all of them super well, but it certainly helps because you know what people's strengths are, you know what people's weaknesses are, you can be somewhat more honest in conversations you have with people.

And then it does lead, you know, you have all these crazy ups and downs in these businesses and you don't want things to blow apart on 1 of the lows.

You also make a statement that you are not a lottery ticket.

Well, it's always a very important question in business.

And how much is everything just a matter of luck 1 way or the other.

And it's a very hard question to answer because we can never run this experiment twice.

But I think it's always a good sense to have to sort of to tack a little bit against this chance idea and this luck idea.

Certainly as a venture capitalist, when I've invested in businesses, if I treat them as lottery tickets, where I don't know if this is going to work, maybe it works, maybe it won't, I'll give them some money.

You know, once you do that a bunch of times, you've already psyched yourself into losing money.

And I found that I do much better when I have really high conviction and willing to put a lot of capital behind an idea.

Whereas when I'm saying that it's a lottery ticket, what often is really going on is that I'm actually too lazy to really think about what some of the strengths and weaknesses of a given business are.

And so even though there is such a thing as luck and it's quite important in some ways, I think we exaggerate its importance and often when we use the word luck we should instead just be thinking a little bit harder.

And if you think that you've been lazy, the rest of us have a lot to worry about by comparison.

But if you think about this idea of luck, in the book, you actually say in a way you are playing a lottery ticket, because on average, the most successful investment in a fund will outperform the rest of the funds.

And so how do you reconcile that with the lottery idea?

Well, that's not so much a lottery ticket as it is that you do have these very extreme outcomes where some of these companies end up being vastly more successful than others.

And there's sort of this very unequal distribution.

And they're sort of more unequal than our intuitions about this often are.

So I think of the lottery ticket part as just, is the company going to do well?

So I think there's some companies that do reasonably well.

So as long as they all succeed, that's fine as an investor.

But I think it's also important to keep in mind that some do a lot better than others, and this changes one's thinking in a lot of ways.

So for example, you might have, you would have been better off as the 100th person at Google than the CEO, founder of most venture backed startups in Silicon Valley.

And so it's possible, because these outcomes are so wildly uneven, that we slightly overvalue people starting companies.

And we undervalue asking, is there a really valuable company you should try to join instead.

That's an interesting connection back to the monopoly discussion because there's maybe 1 misinterpretation of your monopoly idea is that everybody should go and try to start a company that no one's building.

In reality, you're recommending that a few of us do that and the rest maybe think about joining that company?

Well, if you have a great idea, you should go ahead and start it.

But you shouldn't start a company for its own sake.

And certainly, there's always a sense, a suspicious 1 has, that the Fourth online pet food company, the 10th and Film Solar Panel Company are not quite as original and groundbreaking as people might advertise them to be.

So talk to us a little bit about how you think about when you want to actually be involved as a founder versus an investor.

I'm thinking of Palantir as an example, where many people know it now as a killer app that's being used to fight terrorism.

In other cases, you've invested and taken a little bit more of a backseat role.

Well, I mostly work as an investor these days.

I think that, I do think that, at Palantir, I'm chairman, which is sort of a board level involvement, but not sort of a day-to-day, showing up at the office every single day, working in some operational managerial capacity.

I think in most cases, you're either sort of all in or not and it's not really possible to do these companies part time.

And as an investor, you always have to have a certain sense of humility that once you write that check, you only have very limited control over what you can do.

So you have to think really hard when you write those checks.

Now, when you think about your investing career, is there an investment that you regretted the most looking back and maybe learned the most from?

Well, sort of the somewhat odd 1 that I always give as an answer to that is that the biggest mistake I made in the last decade or so was not doing the Series B round at Facebook.

So, I invested in summer of 2004, the Series A round.

Then there was a much higher valuation, about 12 times the per share price, 8 months later, which was the Series B.

And I actually thought about it pretty hard, but on paper, my stake was already really big.

But it would have really been a good investment to make.

There were more than 12 times as many users, so on sort of a per user basis, it was perhaps actually lower than the first round.

And so there are all these intuitions we have about these companies that tend to be quite off.

They can change for the better in ways that are very dramatic and very underestimated.

And sometimes they also change for the worst.

Maybe nothing has changed in a year, and that itself is a change for the worse, because you only have a certain amount of time during which you have to accomplish what you're going to accomplish.

It's like this option that sort of is running out of time.

So let's take this back to the book, then.

You were teaching a class at Stanford Law School, and there was a student, Blake Masters, who was taking notes, which went massively viral.

At what point did you decide, I want this to be a book, and why?

It was a class, actually, undergraduate in the computer science department.

Blake was at the law school at the time, sat in on the class.

We had about 300, 000, 400, 000 people read them on the internet.

And we concluded, wow, there's so much interest in this.

There's no reason we need to do this just in Stanford or just in Silicon Valley.

Let's try to distill all these thoughts into an even more crisp form.

And the best form we came up with was to actually write a book, and that's what we did.

The book is full of some statements that are, at best, provocative.

But I think everyone, in many cases, would find them to be even a little bit contrarian.

How often do you believe everything you write versus you're pushing an argument to its extreme but maybe questioning how far you'd go on it?

So I guess then as a follow-up question, when you think about how to best get people to adopt some of your more radical ideas, Is there a point at which you don't want too many people to follow them?

So if we were to take, for example, the idea of starting a monopoly, we said not everybody should do it.

When you have people dropping out of college, perhaps to think about joining your fellowship, Again, it's for 20 people.

Are you designing some of these ideas just for a subset as opposed to for the majority?

Well, I don't believe that there's a one-size-fits-all approach.

So I think on, you know, I don't think everyone should go to college.

I don't think everyone should drop out of college and start a company.

And I think in terms of what we do with our lives, with our careers, there's no 1 right answer.

I think in my critique of our society and cultures that things have gotten way too tracked.

People get tracked from the time they're 3 or 4 years old, testing mania, tracking mania.

And it makes people somewhat better at the things they're being tested on.

But then I think it also has this unfortunate narrowing effect on our whole country that's probably not the best way to be.

I think that's actually a great segue to the last question I wanted to pose, which is you were on 1 of those tracks.

You went to law school, you were working in the financial world, and you managed to get off.

Well, I sort of think of myself as having had a rolling quarter-life crisis in my 20s, where there were all these—in my eighth-grade yearbook already, 1 of my friends said I was going to go to Stanford as a sophomore in 4 or 5 years.

And that sort of happened, went to law school, did the Wall Street law firm, Wall Street Bank, and it was a very strange dynamic where from the outside everyone wanted to get in, on the inside everybody wanted to get out.

And you were forced to really have to rethink what did I really want to do, what was I really passionate about, and then move back to California.

And in the tech boom in the late 90s, got involved in that and ended up starting PayPal.

But I think if I had to give advice to my younger self, I might still go to Stanford.

I might still go to law school, but I'd ask far more questions, why was I doing it?

Was I doing it just for status and prestige, or was I doing it because I was really substantively interested?


Speaker 0: I'm Adam Grant. We're here with Peter Thiel, co-founder and CEO of PayPal, the first outside investor in Facebook, as well as a legendary investor and entrepreneur in Silicon Valley. He's the author of 0 to 1, an extraordinary new book, and we're thrilled to find out, for starters, Peter, why is competition for losers?

Speaker 1: Well, this was the headline of the Wall Street Journal excerpt of our book. The chapter title in the book itself said, all happy companies are different. So it was a slightly milder form of that. But it was this provocative idea because we always think competition is for winners, and a winner is someone who's better at competing, is more intense at competing. It's like you're in a high school sports team, and you learn to compete against the people you're up against, and the really talented people are the ones who compete the best.

But what happens when you compete is you always just are focusing on the people around you, on what people are already doing, what's deemed valuable by other people. And you often lose sight of building things that are 1 of a kind, different, truly valuable. And 0 to 1 companies are companies that have not been built before. The next Bill Gates will not start an operating system. The next Larry Page won't start a search engine.

The next Mark Zuckerberg won't start a social networking company. If you're copying these people, you're not learning from them. If you're competing against these people, if you think you're competing with these people, you're actually trying to copy them. And again, you're not learning from them.

Speaker 2: Wow. So on the flip side of that, then, you argue we should actually think about monopoly as

Speaker 1: a good thing. Why? Well, it is certainly from the point of view of a founder or entrepreneur, you want your company to always be a monopoly. You want to be offering something to the world that no 1 else is offering and that therefore you'll have some really healthy profit margins around your business. So from the inside I would argue monopoly is always a good thing and that's what every entrepreneur should attempt to build.

From the point of view of society as a whole I think monopolies deserve their bad reputation when things are static. So it's like the Parker Brothers board game where you're just reshuffling the deeds or it's like the post office or something like that where the monopoly is just a rent collector or a toll collector. That's bad. But when it's something dynamic like Apple computer building the first smartphone that worked and you have people lining up around the block to buy it. That's a monopoly that does not create artificial scarcity, but that's creating something new and that's doing something that's good for society as well.

Speaker 2: So if you put these ideas together, is the suggestion then that Mark Zuckerberg shouldn't have started Facebook given that Friendster and MySpace were already out there or that Larry and Sergey had Alta Vista and asked Jeeves and others to compete with. So Google shouldn't have existed.

Speaker 1: Well, it's always, it certainly is always a question what, you know, what dimension is really new and really different. I would argue that with Google and the search business, it was the page rank algorithm, it was a way to automate search and computerize it that was quite new and that fundamentally transformed search into this vastly bigger space than anyone had thought it was in the 90s, in the pre-Google 90s. And in a similar way, I would say Facebook was the first 1 to really crack the code on making personal identity real. And 1 of my friends, Reid Hoffman, went on to start LinkedIn in the 90s and started a company called Social Net. So they already had social and networking in the name.

And their model was that we'd have these avatars on the internet, and maybe I'd be a dog and you'd be a cat. And then we have these questions, how would we get along with each other? And so there were all these virtual world simulated reality social networking plays, but they were fundamentally about people being different from who they really were. Facebook was the first 1 to really capture real identity. So Sometimes companies are iterations on things where there's just a fundamental breakthrough in 1 really key dimension.

Speaker 2: So tell

Speaker 0: me a little

Speaker 2: bit about why you think software has been so lucrative and why have we seen so much progress in digital technology recently?

Speaker 1: Well, there's sort of a lot of reasons for this, but this certainly has been the last 40, 50 years we've had enormous innovation in the world of bits, somewhat less in the world of atoms, clean tech, energy more generally, transportation, biomedical, a lot of these other areas seem to have been a lot tougher. 1 of the things that I think is true of any great company is you have to build something that is valuable to the world and you have to capture some fraction of what you create. So you have to create X dollars in value and you have to get Y percent of X. And X and Y are these totally independent variables. In most cases, Y is about 0 percent.

And this is actually a disturbing element in the history of innovation that a lot of innovators discovered things but weren't able to get anything. Tesla was out-competed by Edison, even though Edison had an inferior technology. Or the Wright brothers came up with the first airplane, but they didn't get to be rich. And of course in the sciences, it tends to be even worse. So If you're Einstein, you come up with general relativity.

You don't get to be a billionaire, you don't even get to be a millionaire. And so there is something, so it's always this question of how do you actually capture some of the value of what you create. I think there is something very unusual about software businesses, where so many of them have this monopoly-like character that enables people to capture a tremendous amount of value. And I think that's sort of this very underexplored dimension of it. The marginal cost of producing software is 0, so you have these incredible economies of scale, and that's sort of a classic monopoly, natural monopoly business.

Speaker 2: It's really interesting. It makes me wonder what's going to come next. So if you think 20, 30, 50 years down the road, is there going to be a next digital revolution and where will that be?

Speaker 1: Well, I think it's a safe, it's a fairly safe bet that the digital revolution just keeps going. You know, it's been going for 40, 50 years. The contexts have gradually shifted from, you know, hardware, semiconductors, to software, internet, mobile internet. And so I think, but I think in this space broadly is a very good place to look. And while we've constantly explored looking at all sorts of other technological verticals, space, biotech, genomics, energy, The bulk of our focus is still on software for this reason.

Speaker 2: So let's talk about the people behind the software. 1 of my favorite lines in 0 to 1 was that you didn't really trust a tech CEO wearing a suit.

Speaker 1: Well, it was in the context of a lot of the clean tech companies in the 90s where you had these sort of people who had a certain look to them and it sort of looked, and again it's always fact specific, there are no hard and fast sartorial rules, but in Silicon Valley if you were wearing a suit it looked like in a pitch meeting, it looked like you were bad at sales and worse at tech. And so it had sort of that very specific meaning.

Speaker 2: Really interesting. So you wouldn't make the broader statement that we should just leave suits out of business altogether?

Speaker 1: It depends totally on the context. So these things are always, always very context specific. I think they're definitely 1 of the people rules that I find to be very true is that these companies often work well if the people have known each other for a long time or there's some good prehistory. So whenever I talk to people who founded a company, I often like to ask the prehistory question. When did you meet?

How long have you been working before you started the company? A bad answer is we met at a networking event a week ago and we started a company because we both want to be entrepreneurs. And a good answer is we were in college together for 4 or 5 years working on this, thinking about this, and I'm more on the business side and the other person's more on the tech side or something like that.

Speaker 2: And this was 1 of the secrets behind the PayPal mafia that you were a part of. Did you know back then that it was so critical to start a company with people that you knew well and trusted?

Speaker 1: Well, I don't think you need to know all of them super well, but it certainly helps because you know what people's strengths are, you know what people's weaknesses are, you can be somewhat more honest in conversations you have with people. And then it does lead, you know, you have all these crazy ups and downs in these businesses and you don't want things to blow apart on 1 of the lows.

Speaker 2: You also make a statement that you are not a lottery ticket. What is that about?

Speaker 1: Well, it's always a very important question in business. What is the role of chance? And how much is everything just a matter of luck 1 way or the other. And it's a very hard question to answer because we can never run this experiment twice. But I think it's always a good sense to have to sort of to tack a little bit against this chance idea and this luck idea.

Certainly as a venture capitalist, when I've invested in businesses, if I treat them as lottery tickets, where I don't know if this is going to work, maybe it works, maybe it won't, I'll give them some money. You know, once you do that a bunch of times, you've already psyched yourself into losing money. And I found that I do much better when I have really high conviction and willing to put a lot of capital behind an idea. Whereas when I'm saying that it's a lottery ticket, what often is really going on is that I'm actually too lazy to really think about what some of the strengths and weaknesses of a given business are. And so even though there is such a thing as luck and it's quite important in some ways, I think we exaggerate its importance and often when we use the word luck we should instead just be thinking a little bit harder.

Speaker 2: And if you think that you've been lazy, the rest of us have a lot to worry about by comparison. But if you think about this idea of luck, in the book, you actually say in a way you are playing a lottery ticket, because on average, the most successful investment in a fund will outperform the rest of the funds. And so how do you reconcile that with the lottery idea?

Speaker 1: Well, that's not so much a lottery ticket as it is that you do have these very extreme outcomes where some of these companies end up being vastly more successful than others. And there's sort of this very unequal distribution. Not all companies are created equal. And they're sort of more unequal than our intuitions about this often are. So I think of the lottery ticket part as just, is the company going to do well?

Will it work, or will it fail? So I think there's some companies that do reasonably well. Some do a lot better than others. So as long as they all succeed, that's fine as an investor. But I think it's also important to keep in mind that some do a lot better than others, and this changes one's thinking in a lot of ways.

So for example, you might have, you would have been better off as the 100th person at Google than the CEO, founder of most venture backed startups in Silicon Valley. And so it's possible, because these outcomes are so wildly uneven, that we slightly overvalue people starting companies. And we undervalue asking, is there a really valuable company you should try to join instead.

Speaker 2: That's an interesting connection back to the monopoly discussion because there's maybe 1 misinterpretation of your monopoly idea is that everybody should go and try to start a company that no one's building. In reality, you're recommending that a few of us do that and the rest maybe think about joining that company?

Speaker 1: It's important. Well, if you have a great idea, you should go ahead and start it. But you shouldn't start a company for its own sake. And certainly, there's always a sense, a suspicious 1 has, that the Fourth online pet food company, the 10th and Film Solar Panel Company are not quite as original and groundbreaking as people might advertise them to be.

Speaker 2: So talk to us a little bit about how you think about when you want to actually be involved as a founder versus an investor. I'm thinking of Palantir as an example, where many people know it now as a killer app that's being used to fight terrorism. There you co-founded. In other cases, you've invested and taken a little bit more of a backseat role. When do you decide to jump in full?

Speaker 1: Well, I mostly work as an investor these days. I think that, I do think that, at Palantir, I'm chairman, which is sort of a board level involvement, but not sort of a day-to-day, showing up at the office every single day, working in some operational managerial capacity. I think in most cases, you're either sort of all in or not and it's not really possible to do these companies part time. And as an investor, you always have to have a certain sense of humility that once you write that check, you only have very limited control over what you can do. So you have to think really hard when you write those checks.

Speaker 2: I would hope so anyway. Now, when you think about your investing career, is there an investment that you regretted the most looking back and maybe learned the most from?

Speaker 1: Well, sort of the somewhat odd 1 that I always give as an answer to that is that the biggest mistake I made in the last decade or so was not doing the Series B round at Facebook. So, I invested in summer of 2004, the Series A round. Then there was a much higher valuation, about 12 times the per share price, 8 months later, which was the Series B. And I actually thought about it pretty hard, but on paper, my stake was already really big. But it would have really been a good investment to make.

There were more than 12 times as many users, so on sort of a per user basis, it was perhaps actually lower than the first round. And so there are all these intuitions we have about these companies that tend to be quite off. Things can change very quickly. They can change for the better in ways that are very dramatic and very underestimated. And sometimes they also change for the worst.

Maybe nothing has changed in a year, and that itself is a change for the worse, because you only have a certain amount of time during which you have to accomplish what you're going to accomplish. It's like this option that sort of is running out of time.

Speaker 2: So let's take this back to the book, then. You were teaching a class at Stanford Law School, and there was a student, Blake Masters, who was taking notes, which went massively viral. At what point did you decide, I want this to be a book, and why?

Speaker 1: It was a class, actually, undergraduate in the computer science department. Blake was at the law school at the time, sat in on the class. He took the notes, they went viral. We had about 300, 000, 400, 000 people read them on the internet. And we concluded, wow, there's so much interest in this.

There's no reason we need to do this just in Stanford or just in Silicon Valley. Let's try to distill all these thoughts into an even more crisp form. And the best form we came up with was to actually write a book, and that's what we did.

Speaker 2: The book is full of some statements that are, at best, provocative. But I think everyone, in many cases, would find them to be even a little bit contrarian. How often do you believe everything you write versus you're pushing an argument to its extreme but maybe questioning how far you'd go on it? Oh, I believe everything I say. So I guess then as a follow-up question, when you think about how to best get people to adopt some of your more radical ideas, Is there a point at which you don't want too many people to follow them?

So if we were to take, for example, the idea of starting a monopoly, we said not everybody should do it. When you have people dropping out of college, perhaps to think about joining your fellowship, Again, it's for 20 people. Are you designing some of these ideas just for a subset as opposed to for the majority?

Speaker 1: Well, I don't believe that there's a one-size-fits-all approach. So I think on, you know, I don't think everyone should go to college. I don't think everyone should drop out of college and start a company. And I think in terms of what we do with our lives, with our careers, there's no 1 right answer. I think in my critique of our society and cultures that things have gotten way too tracked.

People get tracked from the time they're 3 or 4 years old, testing mania, tracking mania. And it makes people somewhat better at the things they're being tested on. But then I think it also has this unfortunate narrowing effect on our whole country that's probably not the best way to be.

Speaker 2: I think that's actually a great segue to the last question I wanted to pose, which is you were on 1 of those tracks. You went to law school, you were working in the financial world, and you managed to get off. How did you decide to make the leap?

Speaker 1: Well, I sort of think of myself as having had a rolling quarter-life crisis in my 20s, where there were all these—in my eighth-grade yearbook already, 1 of my friends said I was going to go to Stanford as a sophomore in 4 or 5 years. And that sort of happened, went to law school, did the Wall Street law firm, Wall Street Bank, and it was a very strange dynamic where from the outside everyone wanted to get in, on the inside everybody wanted to get out. And you were forced to really have to rethink what did I really want to do, what was I really passionate about, and then move back to California. And in the tech boom in the late 90s, got involved in that and ended up starting PayPal. But I think if I had to give advice to my younger self, I might still go to Stanford.

I might still go to law school, but I'd ask far more questions, why was I doing it? Was I doing it just for status and prestige, or was I doing it because I was really substantively interested?

Speaker 2: Great. Thank you, Peter.

Speaker 1: Thanks for having me, Adam.

Speaker 2: You

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