Speaking at tonight’s PandoMonthly event at the Madrone Studios in San Francisco, PayPal founder, Facebook uberinvestor, and Libertarian du jour Peter Thiel told our audience that competition and capitalism are not the same thing.
Businesses can waste energy and resources competing like crazy instead of focusing on creating unique products that can change the world, Thiel said.
“People get addicted to competition,” he said. “They end up believing that things that are hard are valuable.” He conceded that at some point competition might make people and businesses stronger, but it often comes at the cost of “going through the open door that no-one is even looking at”.
PayPal was successful as a business because it was dramatically bigger than its nearest competition, said Thiel. If it had been competing for smaller margins, it wouldn’t have ended up being great. It’s analogous to Apple’s runaway success with the iPhone, which stood alone as a unique product, while developers for its app stores had to compete for attention in an ecosytem that counts competing products by the tens of thousands.
“Competition per se is just generally very disruptive. You end up fighting over things that don’t matter.”
When our host, Sarah Lacy, asked Thiel if that meant that monopolies are a good thing, Thiel clarified his statements. Monopolies are obviously bad in the static world, he said, but if the trade-off is that people are developing unique technologies, “that’s a much better society.”