Lecture 5 - Competition is for Losers (Peter Thiel) 

Still as fresh and valuable today. Who else is watching this in 2024, I hope people still appreciate this lecture series and are equally amazed to see how these great insight from big entrepreneurs is available to everyone for free.

the summary of zero to one book, really worth watching especially if you didn't read the book.

This one is a gem of a lecture. Needed to watch it twice, to take home 10% of the lecture with the speed at which Peter thinks and speaks!

I re-visit this lecture over and over again as I'm building my startup. So much gold each time. One of the best vids on the internet for startup success 💯💰

If you haven't read Zero to One, then get the book. It's a deep elaboration on this lecture. It's discussion of the success of 1950s America (from an innovation standpoint) is fascinating.

00:21 single idee fixe, monopoly, wants always avoid competition 00:55 capturing value, simple formula, A business creates X dollars of value and captures Y % 03:44 perfect competition, econ 1, profit margin, revenue, market capitalization 04:35 monopoly 05:37 lies 07:02 narratives 07:57 restaurants 09:30 intersection 10:15 the opposite lie 11:30 technology company, global consumer technology 12:40 narrow market, cash 13:37 how to build monopoly, small market 15:34 PayPal, eBay 17:01 cleantech, massive market 18:41 characteristics of monopoly, 10 times better, in some order of magnitude 24:00 growth, durability 28:05 history of innovation 37:03 psychology of the competition, losers 42:26 questions, what's the narrative of the market

The scientists' work is their reward Mr. Thiel. For a man of your intelligence, it's amazing how dense you are to the possibility that value can be measured in units other than currency!

Funny that this presentation has started in a "small market" (Stanford students) and led to a bigger market (Zero to One-Buyers) - nice Peter ;)

Very clear explanation. Totally agree. World rishest people think in the same way. They build o buy monopolies and then they fill they pockets. The only way to get ahead in business is to be different. People will tell you are crazy to do different things, you will be crazy but but you willl not be stupid.

Can’t believe this lecture was 9 years ago. Still relevant today. Btw, the first dude is Sam Altman of OpenAI.

Incredible talk, very honest, critic, and complete in his perceptions.

Peter: "Scientist believe we live in a just world in which they will be rewarded for their inventions by society....this is probably the fundamental delusion of scientists in our society" Crowd: *laughter* Peter: *dead fucking serious*

Google was 5th search company. Apple was 6th smart phone company, Facebook was 4 social network company. Amazon was 100th book store company. Microsoft was 10th software company... they all started like that. They didn't invented their own markets that were small at the beginning, they were better than competitors. That's it. That's the secret. What this guy is talking about?

A lecture worth a million dollars

Only thing I might offer on the topic of "being the last mover;" those companies were "last" because they were sooooooo good that they scared anyone else from entering the space.

Zero to one in 50 minutes :)

"Don't always go through the tiny little door that everyone's try to rush through. May go around the corner and go through the vast gate no one's taking" - Peter Thiel. Loved this line from the lecture.

Sam Altman cameo for the intro.

This is the most powerful lecture of the series.

I will revisit this lecture in about a year. I think I am sort of not capable enough today to fully grasp this deeply.

Thank you Peter, thank you Y combinator for making this happen.

Another great lecture, I'm loving this series on a Friday afternoon

(Also posted to the discussion forum on the class website (specifically, the discussion forum for this lecture), join in the discussion if you can!) There is some excellent advice and information here. I found some of the points to be a little jarring with some of my pre-concieved ideas on competition, which is not to say I think I’m right, but rather I think it is an interesting discussion. It is difficult to disagree with someone with such extensive experience. If I had to boil down one of the main messages of the lecture, it would be at about 19:40 where Peter says: “All happy companies are different because they are doing something very unique. All unhappy companies are alike because they fail to escape the essential sameness that is competition.” 1) The assumption being made is that competition = “sameness”. I don’t think that is the point of competition. IMO, competition is about delivering value that is different than competitors. So competition is most definitely about being different, not the same. Competition *can* give you a way to validate that your idea is actually appealing to others, *but* with the assumption that you have a different philosophy (than the competition) which means offering a product for people who identify with your philosophy or your way of doing things (Apple vs. Microsoft, MySpace vs. Facebook, Tesla vs. Every-other-electric-car (or every other car), Simple vs. every-other-bank, Betterment vs. Every-other-brokerage, Basecamp vs. every-other-PM-tool, etc.). Certainly all of these companies have a lot competition, but I don’t think that is bad. That is, I don’t think these guys are losers :) That is to say, using competition as validation is not the same as doing something only because someone else does it. 2) If companies only attempted to do things that haven’t been done before we’d probably all have the same number of “things”, gadgets, etc. available to us, they would just cost a lot more and not be as good (quality, features, aesthetics, etc.). This is why competition is good (at least for the consumer). 3) One example used was that “The next Mark Zuckerberg won’t build a social network.”... but that’s assuming that Facebook is as good as social media will ever get, and there is no room for improvement/disruption. Well… maybe, but I think, for example, that society is constantly redefining how we want/need to communicate. I can’t imagine that in 50 years from now, Facebook (as we know it today) is still the primary means of social media. Perhaps Facebook adapts to change, or perhaps a new company/idea disrupts the market… 4) I don’t think there will ever be a “Last Mover”. Or perhaps, maybe I just hope there isn’t! It’s almost depressing to think of these big companies as being “last movers”. Surely they will be disrupted. If I had to name a caveat, there is a strong case for Google.. They seem to do “everything” right as far as their vision, research dedication, etc.. But I imagine the same thing was being said about AT&T/Bell Labs in the mid 20th century… This is related to the quote (said to have been from) Charles H. Duell (Commissioner of US patent office in 1899): “Everything that can be invented has been invented.” To Peter’s credit he did mention “10, 15, 20 years” as a potential time period, but I’m not sure I would call it “Last Mover” if that is the expected time-period, which is relatively short. Amazon has been around almost 20 years, Paypal about 15. I think these companies have potential to be around for a while, but would think it is pre-mature to dub them as “last movers”. 5) I believe the approach of only doing things that you think as being potential "last movers", while not inherently bad, is a potential way to pass up many opportunities. Again, perhaps Betterment doesn't expect to take over the online brokerage industry, but rather, they have a philosophy that they believe in, and think other people believe in. They aren't losers for entering a space with intense competition, but they are passionate about their trading philosophy, and are excited to be able to help others even though they (assumedly) don't believe that everyone who trades online will be interested in their offering. I bet they are still a "happy company", knowing that they will never monopolize online trading. Again, great information, but here are some different thoughts on competition.

Palantir is far from being the biggest data analatycs company, Clarium capital is definitely not the biggest capital investment company, Paypal even while being acquired by ebay is still not the overlord of payment processes. I guess my man was right about one thing. People and companies will lie to you about what it is they are doing and how exactly they are doing it. GRAIN of salt.

Thank you very much for this nice conversation, Peter.

@41:23 Peter is an absolute thinker - focused on what’s truly important, not one who obsesses about insignificant relative differences. Excellent German heritage!

Beautiful thoughts and delivery.

Lecture worth millions of dollars! Truly insightful perspective. Surely gonna change the way I look at opportunities!

On "Competition as validation", in terms of personal development, if competition is for losers, then what is for winners? Identifying what's more important and valuable to oneself and pursue and specialize in it?

Thank you, Pieter,that was valuable, especially in the end

Love how he mentions he doesn't know how branding works.

Incredible and insightful lecture. Well delivered.

“A society grows great when old men plant trees in whose shade they shall never sit." ~ perhaps this is true of scientists and artists. We cannot all be business people and obsessed with profit.

I watch in 2024, one of the most interesting talk's I ever ear

The idea about 'The last breakthrough' is so inspiring

I feel like he redeems his speech by identifying a key takeaway here - that crowds are sometimes very very wrong, and that not all value is rewarded with money. Or rather, not all ways of giving our or creating value is good for getting a cut of that value.

Extremely insightful lecture here

"The something of somewhere is generally the nothing of nowhere."

very good insight.

itna valuable content he...bhai sahab maza aa gaya💯❤

This is very valuable. No colleges tell you this (although it is happening in a college class 😅)

"The opening line in Anna Karenina that all happy families are alike. All unhappy families are unhappy in their own special way. And the opposite is true in business, where all happy companies are different because they're doing something very uniquely, where as all unhappy companies are alike." WOW .

the best video about start up

First time seeing this, profound lecture

44:35 - He definitely did not read the lean startup, he has observed brilliantly how it has actually been applied as apposed to what it describes to do.

Love the analogy "Minnow in a vast ocean."

Does anyone know where to find the "anti-aspergers" study he mentions at the end(~48:00).

Still can’t believe this is out here, for free.

Now this is a Business Teacher, not the gross one from lecture 3 :)

Thats a smart intelligent man. One of a kind!

Fantastic lecture.

@29:45 I think he underestimates the motivation from the 'quest for knowledge' in scientists ....The real scientists out there do not want to become millionaires ... the real scientists do not want any recognition ... they become scientists because of their undying zest for the pursuit of knowledge ....

Learned something. Great talk.

So much more insightful than the crap shown at my company.

Interesting perspective for sure. Big fan of the channel.

Would have loved it if it was condesed to 10 minutes. I found it drawn out. Was still worth listening

Isn't this blue/red ocean theory?

Yes! I hate competing with people or competition. I never participate in any competition that my worth is being measure with other people. But I only focus on working hard to achieve the financial success I want. I have a goal and want to fully focus in achieving it.😅

Brilliant, brilliant, brilliant

I'm watching this lecture series for the first time and what really surprises me is that this obviously wasn't a business level class (ie all the presenter jabs at business majors)... yet last time I checked, a "startup" is still a business is it not? There was a reason Zuckerberg stepped down as CEO at fb... because he knew it wasn't in the best interests of the "business"... No one ever seems to bring that up? Facebook would not be anywhere near the valuation it is today with the "business" individuals (aka Sheryl Sandberg)

00:21 single idee fixe, monopoly, wants always avoid competition 00:55 A business creates X dollars of value and captures Y % 03:46 profit margin, revenue, market capitalization

sharp dude, sharp focus. #sharp

Here to give my yearly tribute.

Peter has advanced level of coolness. Thanks for sharing this!

Amazing talk.

I am just wondering, if it's not about being the last, but about "the idea", didn't die out at some point... Or get popular. 1. Ensuring that I am rewarding creators that actually create "some" values. 2. Creators, like me, get recognition... (but not necessarily, money) So, I am feeling like you are telling Pandora's Box. What should I do best as a customer?

Gem of an Information on internet👍

AT 37 minutes right now, and just wow. Still supe relevant today. He has identified the relevant patterns.

What was the last question? I can't hear/understand it..

is the y% of x the epitome , why its y combinator naming convention

Wonder how he would explain Apple; a company with less than 20% global market share, most valuable company out there right now. He is right in many ways, but he should have used "competitive edge" instead of "perfect competition / monopoly" paradigm to explain his point. You compete either by differentiating yourself (Apple) or via cost (Samsung) to dominate the market. Market shares don't matter in that case, most of the analysis we do in smartphones are on profit shares - market shares don't translate into profits in this case.

sam altman introduces peter thiel, nice

It is an interesting talk. We don't know if some of these markets will actually expand so the value is captured by somone willing to bet that an industry will be there in five years. Still, the idea of monopolies makes me uncomfortable.

The introduction was by opening founder - wow

What is the goal of a startup?

Peter Thiel is savage

"if people at twitter make billions of dollars it must be that twitter is worth far more than anything Einstein did" (36:12) I understand he's supposedly exposing a faulty rationalization, but who the hell even thinks like that? It sounds like Thiel is trying to talk himself into not believing it. lol Is it really inconceivable to him that *some* people may dedicate their lives to R&D (like studying cancer, or clean energy) without the intention of making money? He does have a point in that scientists often have no (significant) pecuniary outcome from their breakthroughs, but he goes way beyond that. "The fundamental delusion that scientists tend to suffer from" is that they "live in a just universe that will reward them for their inventions". Jesus, that's just wrong in so many levels. Also, please don't be sorry for Einstein (30:22). He could have probably earned a lot of money if he wanted to. Instead, he was more interested in unifying physics, advocating for world peace and living a comfortable life. I don't know how I got to this talk anyway... I was watching a series on how to start a Startup.

so good.. thank you so much!

Wow! What an incredible genius! Thank you.

Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel has been very influential.

The guy who asked the first question is South African surely?

This is man is a God.

00:03 There are only two types of businesses: perfectly competitive and monopolies. 06:03 Monopolies and non-monopolies both lie about their market size to differentiate themselves. 11:44 Successful companies start with small markets and expand. 17:23 To build a successful monopoly business, focus on small markets and have a proprietary technology that is an order of magnitude better than the next best thing. 22:26 In Silicon Valley, durability is undervalued compared to growth rates. 27:27 Most scientific and technological innovations do not result in financial rewards for their inventors. 33:01 Vertical integration is key to technological progress 38:10 Competition can be problematic and lead to loss of focus on what's truly important. 42:51 Great companies differentiate themselves with quantum improvements, not just iteration. 47:42 Facebook was the first social networking site to get real identity.

first time heard claps at the end of class......42:02

I understand that why monopolies, because of regulation by govt, would want to show the narrative that they are part of huge markets and competition, but why would the businesses running in perfect competition want to project that they are in the middle of the continuum

Finished, thanks

Wait for a second, so blake masters was sitting in this class, right?

Impressive academic crime right there. Packed probably close to a semester into 40 minutes without garbling core idea

The name of the game is this one.

What if Mark Zukerberg would have thought "Next Jonathan Abrams would not build Friendster, so I shouldn't build Facebook." And also, what if Larry Page would have thought "Next Jerry Yang would not build Yahoo, and so I shouldn't build Google."

Well that was depressing and inspiring AF, LoL

Don't you worry about losing first mover advantage to other markets by starting so niche?

Is it Sam from open ai ?? 🤔

I might be 17, but one day I am going to study at Stanford! Mark these words, admissions office :). Sincerely, Lemar B.

8:36 im done 😂

50 minutes of Zero to One !

no way, the guy doing the intro was sam altman

What a great lecture !!!

This is what Warren mean when he talks about investing in companies with durable competitive advantage

Power can not be left to chance much less fairness a level playing field and actual competition.