Peter Thiel’s CS183: Startup - Class 18 Notes Essay


Here is an essay version of my class notes. Errors and omissions are mine. Credit for good stuff is Peter’s. Thanks to Joel Cazares for helping proof this.

I. Traits of the Founder 

Founders are important. People recognize this. Founders are often discussed. Many companies end up looking like founder’s cults. Let’s talk a bit about the anthropology and psychology of founders. Who are they, and why do they do what they do?

A. The PayPal Origin

PayPal’s founding team was six people. Four of them were born outside of the United States. Five of them were 23 or younger. Four of them built bombs when they were in high school. (Your lecturer was not among them.) Two of these bombmakers did so in communist countries: Max in the Soviet Union, Yu Pan in China. This was not what people normally did in those countries at that time.

The eccentricity didn’t stop there. Russ grew up in a trailer park and managed to escape to the one math and science magnet school in Illinois. Luke and Max had started crazy ventures at Illinois Urbana-Champaign. Max liked to talk about his crazy attributes (he claimed/claims to have 3 kidneys), perhaps even a little too much. His came to the U.S. as sort of a refugee weeks after the Soviet Union collapsed but before other countries were formed. So he liked to say that he was a citizen of no country. It made for incredibly complicated travel issues. Everybody decided that he couldn’t leave the country, since it wasn’t clear that he could get back in if he did.

Ken was somewhat more on the rational side of things. But then again, he took a 66% pay cut to come do PayPal instead of going into investment banking after graduating from Stanford. So there’s that. 

One could go on and on with this. The main question is whether there is a connection—and if so what kind—between being a founder and having extreme traits.

B. Distributions

Many traits are normally distributed throughout the population. Suppose that all traits are aggregated on a normal distribution chart. On the left tail you’d have a list of negatively perceived traits, such as weakness, disagreeability, and poverty. On the right tail, you’d have traditionally positive traits such as strength, charisma, and wealth. 

Where do founders fall? Certainly they seem to be a bit less average and a bit more extreme than normal. So maybe the founder distribution is a fat-tailed one:

But that radically understates things. We can push it further. Perhaps the founder distribution is, however strangely, an inverted normal distribution. Both tails are extremely fat. Perhaps founders are complex combinations of, e.g., extreme insiders and extreme outsiders at the same time. Our ideological narratives tend to isolate and reinforce just one side. But maybe those narratives don’t work for founders. Maybe the truth about founders comes from both sides. 

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This was the song I thought of when I read the latest ridiculous pseudo-intellectual, completely unimpressive “analysis” of “single women” in The Atlantic. The title of the article is All the Single Ladies, because: wow, is it 2008 already? The Atlantic is Down With the Kids These Days and Their Culture. Of 2008.

As the fellow in the Zeffirelli film says, caper the caper and sing me the song.

If you missed this absolutely absurd article, which should have been too embarrassing to both the author and the magazine to publish because of its incredibly low quality of thought, you can get the takeaways here. The putative purpose is to celebrate singlehood, particularly as applied to women (singlehood in men is only to be bemoaned as self-indulgence and a societal obstruction to the happiness of single women, obviously). But the real purpose of the article seems to be to prosecute, once and for all, before a grand jury of subscribers, the romantic life and experiences of the author, one Kate Bolick. Apparently, a few years back she broke up with a guy named Allan because she was rather bored with him, and now she realizes he was her Only Chance at Marriage and Marriage was her the Only Chance at Happiness.

(I don’t know her, and I wish her well -  though I may suggest that her absolutely miserably depressed expression, in which she cannot manage even the ghost of a real smile, was not the best choice for the cover picture of a story about how being 39 and single is awesome and revolutionary).

I almost just don’t even have the time - I mean, have you ever? I can’t even -  for the litany of anecdotally biased stupidity in this article, but let’s take a couple just for giggles.

Here’s one: “We’re contending with a new ‘dating gap,’” Bolick says, “where marriage-minded women are increasingly confronted with either deadbeats or players.”

Again I ask: I mean, have you ever? I can’t even.

Yes, all single men are deadbeats or players. Increasingly, even!  While this idea may seem to be, say statistically impossible to any intelligent human being with rudimentary powers of observation or, more importantly, an ounce of human compassion or insight into human behavior, it is definitely impossible for anyone with any kind of knowledge of basic human history to call this perception “new.” That is, unless this person has literally had their consciousness formed in the past 58 seconds and/or has been struck with some combination of basic devastating ignorance and deep amnesia.  Some men are deadbeats, some men are players. Some of those men are single, some of them are married. All of these things are true of all genders since before the Bronze Age, and was probably true of the first amoeba crawling out of the primordial muck. Come the f*** on.

I doubt even Bolick believes this nonsense. In her opening Ode to Allan, she says he was a perfectly decent man. And he was single. So he was clearly throwing off the deadbeats-and-players ratio.

Again, I don’t know this author. But basic English 101 reading comprehension suggests that anyone who posits such an absolutely ridiculous generalization of an entire gender based on their own limited history (and all of our histories are limited, particularly compared to the entire scope of humanity) probably has a recent history of making very bad choices. And moreover, this person is probably addicted to the drama of dissecting those exact same choices because the thrill of talking about herself and her completely unique situation that no one else has ever experienced probably gets all her neurons far more excited than the hard work of actually fixing the problem and not picking deadbeats and players.

Digression here. Trust me on this: women who talk this way are a Type and if you make the mistake of asking them, they will ruin your entire night, every night, with their perceived and extensive Boy Troubles which are Completely Without A Remedy because they are a Beautiful and Unique Snowflake and that’s why No Man is Strong Enough to Love Them. The trap this Type sets is that they posit absolutely absurd, annoying theories, non-truths and made-up patterns of behavior - behavior mainly exhibited by men, not by the women themselves, because, insight is so much harder than cheap generalizations - and then they sit back smugly and Wait For You to Contradict Them. You will never win this argument, ever. The whole thing is that people reflect back at you exactly what you send to them, and this Type always, always, always, refuses to acknowledge that they are sending an absolute stench of negative assumptions about other people out there. If you’ve ever fallen into this morass, you know the response you’ll get. It Cannot Be Them. They are Perfect in All Their Actions in Romantic Relationships. They are Just Romantic Idealists. They’re Picky. They Bear No Responsibility.

It’s completely self-indulgent and endless. You cannot persuade a closed mind. Walk away.

(By the way, just a note on People. Stop when you’ve reached Bolick’s level of generalization about anybody - men, Catholics, turnip-carvers. When someone thinks they’ve figured out sweeping behavioral patterns based on a sample size of direct experience that they should recognize as mortifyingly small, then they have reached a point where they are completely comfortable not trying to understand or accept others as human beings.

When they say, “the dating gap consists of an increasing number of men who are deadbeats and players,” that is an asshole self-protective move, because they have already rendered all men The Other. Which means, in turn, that they are not showing any empathy towards them. This lack of empathy and rush to judge other people instead of trying to understand them is, in turn, a really annoying and deplorable quality that will discourage good men from dating them. It will also discourage even deadbeats and players from dating them, because those men can see this Judgment and Righteous Outrage coming a mile away. These women are fooling no one. No one cares enough to spend a lot of time contradicting you about every mistaken assumption you have about men, Kate Bolick, so you might as well make the effort to just be right. Just a pro tip. If you don’t believe me, you can find it in books. Any books. It may actually even be in the Encyclopedia Brown series, or maybe even Goodnight Moon, and definitely The Little Prince, because it’s really that basic a concept.)

Here’s another example of muddled thinking. Let’s call this example, “questionable solutions to questions no one ever asked and that no possible data can prove:”

“Statistics show that women are dating younger men, less wealthy men, and even shorter men simply because these men make the women happy — not because they would make good husbands and fathers.”

That’s right, you heard it here first. The year 2011-  in fact, the exact print date of this Atlantic article-  is the first time in history that women married to make themselves happy. Before this - in the 1960s, 1970s, 1980s, 1990s, 2000s and even as late as, say, August 3, 2011, throughout the cultural changes of feminism, post-feminism, third-wave feminism and fourth-wave feminism - women married men only for economic security, and made sure those men were older and taller, because that is the only acceptable form of a marriage. All women agreed on this. Finally, after 10,000 years, women finally figured it out! They decided marriage was supposed to be about happiness! As for the previous 10,000 years: D’oh! Live and learn, I guess.

But we don’t learn what happened to these brave women, who have just married for their own happiness in the minutes since the Atlantic’s October issue went to press. I assume this is largely because all the short, poor, young single men they courageously married are - whoops! - all deadbeats and players. Right? That’s how it works in this  Narnia of an article?

What I’d like to do is get Bolick and Tracy McMillan into a room to have it out in a debate. McMillan wrote an article back in January, Why You’re Not Married, that inspired a lot of controversy and made at least one good point

When it comes to choosing a husband, only one thing really, truly matters: character. So it stands to reason that a man’s character should be at the top of the list of things you are looking for, right? But if you’re not married [and want to be], I already know it isn’t. Because if you were looking for a man of character, you would have found one by now. Men of character are, by definition, willing to commit. Instead, you are looking for someone tall. Or rich. Or someone who knows what an Eames chair is. Unfortunately, this is not the thinking of a wife. This is the thinking of a teenaged girl. And men of character do not want to marry teenaged girls. Because teenage girls are never happy.

Anyway, Bolick’s whole premise here - of someone being 39 and single and happy - is completely not problematic. But people who are happy and comfortable with themselves and their choices don’t write the ignorant, defensive way this article is written. And people who have self-knowledge about their romantic failings go out and sublimate it into songs or poetry or books that millions of people can relate to, like Adele. And people who have self-knowledge and know it’s not easy to get mad skillz on difficult subjects and keep going anyway - they throw down the challenge like Michael Jordan.

I just. I can’t even.

Amazon Takes Aim at ____

Blog by Lyneka Little

"There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp."—Jeff Bezos

On Wednesday, Amazon announced the seven inch tablet computer called the Amazon Fire. The  new product came with a brazen note from company founder and CEO Jeff Bezos about creating premium products while charging customers less. It’s a public note aimed at Steve Jobs, or, um, Tim Cook.

If you’re wondering if the hand held device is an iPad killer, then you’re asking the wrong question. That question is as premature as a 9 ounce baby whale, and I’m not covering what 3000 stories on Google news have already touched upon. It’s too early to know. What we know for sure is the comment on is directed at Apple.  

While some saw the note as a shot at Netflix, on a day of news surrounding new hardware, I find that unlikely. And, as annoying as the price increase has been, attacking Netflix for a subscription price tag of $17.99 a month is like finding fault with the price tags at Walmart. Let’s be clear: Netflix’s price tag is not its biggest problem.

Also, we can also scratch the Barnes and Noble “Nook” off the list because the fancy colored e-reader is not a pricey item in its space.  (Although, the Nook may be a victim of the Fire. Sadly.) Meanwhile,  attacking RIM and HP tablets is the equivalent of snatching Donald Trump’s toupe. That’s not real.

That leaves the highly in-demand iPad. The iPad that some feel the Fire cannot really take true aim at because it’s missing a mic and a camera. You see, apparently, tablets are great devices for skyping with grandmom. The tablet space can be defined right now as the ability to skype. Yep. I mean, that has to be true since a true competitor of the iPad absolutely must have those two things. And, the original iPhone must have started with the ability to copy and paste, connect to 3G and must have debuted on multiple networks to be a successful smartphone. Obvie.

We’re a forgetful public. Success is best remembered in real-time. Very few people recall the work or the process. What was the iPhone in 2007 except an iPod that could make a few undropped calls? What it became is another story… Can the Kindle Fire add a mic and camera at a higher press point? Yes, I’m sure that will be a part of the 2.0 version.

For now, the Amazon Fire will cannibalize the Kindle, which is why the price tag has been lowered. Amazon is forward-thinking by recognizing this. Without talking to any experts, I will say the expectation is for people to begin using the tablet known as Fire in the future. Yes, that’s right, it’s a tablet. It’s not an e-reader. You do not watch movies on an e-reader.

The Amazon Fire could be the PC of tablet computers. And, one space Apple could never could compete is in that space. (I’m not debating whether a MAC is better than a PC) And, that is why the iPod, the iPad and the iPhone exist. Does Apple even want to compete in mass consumption? I’ll refer to the iPod mini and iTunes and iPad to answer that question. I have no comment.

But, remember this: In 2010, during an Apple conference call, Jobs stated, the new crop of tablets will be dead on arrival. [7” was] too small. The companies will increase the size next year and abandon customers and developers that created for the developer.

A year later, Amazon releases 7 INCH Fire. A name no where close to the Kindle. A name that is a word, which Apple is known for doing, except it sticks an “i” in front of the hardware. If consumers are buying content on Amazon, then Apple very well will have a problem in the future. Despite the fact that people seem to have trouble paying for content, it’s very well the make or break of all things digital.

I have more points but I’ll end here: If the Amazon Fire is not attempting to compete with the the iPad, then my new name is Steve Jobs.

Call me by my last name.

On Fire


Looks like I nailed most things about the Kindle Fire, including the name, ship date, and details. I was a little off on the price though. At first, I heard $249 — then I said it was in flux a few days ago. $199 is very impressive and even more aggressive. 

Put simply: this is going to be the Android tablet that people buy. But most people will have no idea that it’s an Android tablet.

The Nook Color is compelling as well, but it lacks two very key things: Amazon content and Expect to hear more from Barnes & Noble any day now.

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