David Brooks writes about Peter Thiel: The Creative Monopoly. He writes:
One of his core points is that we tend to confuse capitalism with competition. We tend to think that whoever competes best comes out ahead. In the race to be more competitive, we sometimes confuse what is hard with what is valuable. The intensity of competition becomes a proxy for value.
In fact, Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists. Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too.
Interesting point. I have heard some of Peter Thiel’s arguments, and they make sense.
However, I think it’s useful to separate the practicality with the theoretical–and by this, I mean that you somehow have to play the game. My hesitation in embracing Thiel’s views entirely is that it probably didn’t hurt that he has a BA and JD from Stanford–it’s easier to form a new market if you’ve got capital and connections behind you. It’s not fair, but people judge other people based upon their poofy college connections or other connections. I do respect Thiel for backing up his words with his $100,000 prizes for students to drop out of college, but again, winning such a prize is an association–it’s almost similar to getting a degree. It’s hard to break from the grid entirely and still succeed. I don’t know that I would recommend doing so, even if you’re just as smart as the dork who spent hundreds of thousands for his degrees.
Otherwise, I agree with Thiel. Hey, Russell Simmons broke free and did something similar when he started Def Jam. If you can start and master a new field, that’s the best place to be. The margins are huge when you’re the only player, and it often helps society more.