HALF MOON BAY, Calif. — PayPal co-founder and billionaire investor Peter Thiel had a lot on his mind Tuesday.
Thiel was at the Ritz-Carlton ostensibly to plug his new book, Zero to One: Notes on Startups, or How to Build the Future. But for those sitting in a packed conference room attending Venture Alpha West 2014, with waves cascading against the cliffs outside, Thiel delivered much more than a reading of passages from his bestseller. In fact, he didn’t touch the book at all.
Instead, Thiel spoke at length about his healthy skepticism of education and healthcare IT software, mobile computing, SaaS, the cloud, and even big data. For him, these amount to Valley buzzwords — and nothing more. Thiel made it clear disruptive technologies, like Airbnb, in which he’s an investor, were the ones that mattered.
Airbnb, he said, is a game changer and therefore “fits the narrative” of companies he would invest in.
Thiel is a busy guy. With a staff, he runs Founders Fund; Clarium Capital, a macro hedge fund; Mithril Capital Management; and Valar Ventures. Thiel, 46, was an early outside investor in Facebook — he gave the then-nascent social media site $500,000 in 2004. When Facebook went public, his shares were worth over $500 million.
Asked by an audience member what he didn’t like these days, Thiel had a ready answer:
“I’m suspicious of everything that is thematic and overhyped, and somehow is not sufficiently differentiated. These are buzzwords that sort of pull a whole bunch of different things into it. Companies that are cloud computing companies, that are somehow insufficiently differentiated,” he said.
He spoke about being an early investor in Friendster and elicited laughs when telling the crowd of his dismay when he walked into their offices and saw pictures of the CEO adorning the walls. For Thiel, that was a big red flag. Friendster never made it as a social networking site, and today is a social gaming company based in Kuala Lumpur.
“It was a fairly dysfunctional place. The office was decorated with large blowup pictures of the CEO, like North Korea,” he said.
He spoke briefly about PayPal, which he co-founded with friends Elon Musk and Max Levchin. They later sold it to eBay.
“We had these T-shirts at PayPal that said ‘We’re going to be the new currency of the world.’ We failed to do that. But we created a new payment system,” he said.
“I’m not a big fan of corporate culture as something independent of what the company does. If people talk about the Aeron chairs or the beanbags or various perks and benefits, I find it symptomatic of a bad culture.”
These days, Thiel is excited about science and anti-aging technologies, which he tracks closely and makes investments in. He has a well-defined criterion for investments: technology that is real and not easy to pigeonhole.
“I think the kinds of things that are underestimated are the companies that don’t fit into some straightforward narrative. A one-of-a-kind company is often one where it’s much harder to tell a narrative — one that is strange, and you don’t know what quite to make of it,” he said.