Peter Thiel and Elon Musk on Entrepreneurship and Innovation

By • May 18th, 2008
Category: Business, Entrepreneur Interviews, Events, Ideas, Infrastructure, Internet and Telecom, Planes and Automobiles, San Francisco, Social Media, Technology

Elon Musk and Mike Malone at TiECon 2008This year’s TiECon was a bit low-keyed and somber and was in ways a reflection of the economic situation in the USA. There were about 2,500 that attended the conference. However on the second day it seemed like there were fewer people, when compared to the first day.

The two opening keynote speakers on both days were like a breath of fresh air since they were a little different in their approach and vision of how they realized their dreams and what they are doing with their millions. Peter Thiel was the keynote speaker on the first day, and Elon Musk was quizzed in an absorbing and engaging way by Mike Malone, a veteran Silicon Valley journalist.

Thiel and Musk belong to a new generation of entrepreneurs and visionaries. Thiel is co-founder of PayPal that was acquired by eBay for $1.5 billion. After PayPal Thiel went on to found Clarium Capital, a macro hedge fund and Founders Fund, a VC company and is today perhaps best known as one of the early backers of Facebook. Musk is also a PayPal alumni, who made his second fortune when PaylPal was acquired by eBay and relocated from Silicon Valley to Souther California to be closer to the Space industry for his SpaceX venture and Hollywood for promoting Tesla, the electric car.

Thiel’s speech scored points with the audience for his content and approach on how to do startups. He said he has no secret formula for success, but instead what he offered was a how-to map on doing startups and business. Using what appeared like a triadic process (he did major in Philosophy and his triadic approach reminded me of Hegel) on how-to-business. Imagine two circles and it is at the intersection of the two circles where you will find success. One circle represents fundamentals like market, technology etc and the second circle represents why people don’t like companies. Another way of looking at the second circle is as Thiel put is that it represents a contrarian approach. The contrarian question to ask is this:   why people think it is not a good idea to start a business?

People generally do a great job on the first circle that represents the fundamentals, and often struggle to answer the second circle that represents the contrarian approach to starting a business. “The piece people often get wrong is the contrarian one… People don’t know what to say…people are scared to tell.” And that statement of Thiel I think resonated very strongly with the audience. He also cautioned that you don’t want to be contrarian but you do want to find out why people don’t like your business idea. What are the reasons? That is the key that you really need to focus upon was his advice.

Thiel was also skeptical about the wisdom of the crowd approach but did not concede that there are certain times the crowd is right.

Curiously, we were we were not allowed to either tape or take any pictures of Thiel during his speech.

On day two Elon Musk chairman of Tesla, the electric car company based in Silicon Valley, created a mild buzz when he drove into the auditorium in his black Tesla roadster. The price tag? $100,000. For the next hour Musk was quizzed by veteran journalist Mike Malone about his vision, dreams, Tesla, alternative energy and entrepreneurship.

Born and brought up in South Africa Musk moved to the USA when he was 17 years old and studied in various places including a two-day stint at Stanford before starting his first company during the dotcom boom. He sold his company and then became involved with PayPal, where Musk was the largest shareholder. He moved to Los Angeles, which is where he currently lives but did confess that he misses living in the Bay area.

During his conversation with Malone he pointed out that there were 3 things that interested him: Internet, space and environment. He fulfilled his dream in the Internet space and is now focused on Space through his XSpace and on the environment with his involvement in Tesla and Solar City. He thinks if everything goes right then it is possible to put someone in Mars by 2030.

I think what Thiel and Musk highlighted is a different phase and dimension of entrepreneurship. Both made millions of dollars through their Internet investment and both have gone to to pursue their individual dreams by being a little different when compared to other investors on Sand Hill Road.  As Bill Campbell, chairman of Intuit,  put it, “Peter (Thiel) is cerebral and conceptual.” Thiel is clearly drawing on his background in Philosophy and Law to access and analyze his investment opportunities in different sectors, while Musk is pursuing his dreams of doing something in the space and environment space. How many successful investors do you know that are something simultaneously in environment and space?Environment and space are the  twin areas where many  government leaders, policy makers, scientists and innovators are going to be focused in the next 20 years at least. Musk thinks that if any breakthrough has to come in either of these sectors it will come from a private company and not the government. I think the history of technology will show that Musk is right in his thinking. Sometimes, all it takes is one person to think different and execute on that vision.

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One Response »

  1. thoroughly interesting & valuable – thanx for posting!

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