6:00: The JFK Jr. Forum is starting to get very crowded as the audience awaits our conversation with Peter Thiel and Niall Ferguson. Peter Thiel is a technology entrepreneur, investor, and philanthropist. He first gained attention for innovations in banking and startup finance. Today he is known as the mentor of the PayPal mafia of entrepreneurs, as well as for his warnings of a coming technology deficit. He works to accelerate innovation to prevent such a crisis by identifying and funding promising technology ideas and by guiding successful companies to scale and dominate their industries.
6:03: Harvey Mansfield introduces Peter Thiel. “B.A at Stanford, Stanford Law School, Wall Street, more fascinating than Warren Gates and Bill Buffett”
6:08: Ferguson asks Thiel what the next Facebook will be. What have you invested in that we have not heard about?
6:10: The horizontal progress is what you see in China, and see what mechanics you can get done. On the other hand, in going from 0 to 1, by definition, every time there is a major innovation in technology, there’s something about it that’s not repeatable. It’s globally competitive, you have to be the best in the world.
6:13: Why is innovation being focused in the virtual world?
6:20: The people who speak about technology are all from the computer industry. Thiel argues that it’s important to take a look at other perspectives, and how technology affects other fields. “You have a disconnect between the broad public opinion and the claim of these experts, and it’s an important question of who is right.”
6:25: Ferguson: It’s election year. You’re a libertarian, so I’m guessing you want Ron Paul to be President, right?
6:30: ”I would like there to be some serious discussion of these issues, and how we deal with some of these topics that are not being discussed. What’s most disheartening about the political process is that so few of the issues can be discussed. To do so would be putting yourself in an unelectable position.”
6:35: Question from audience: How could facebook help us (doctors) save lives? What can be done with medical records to aid our dire need to save lives?
6:35: ”Our healthcare system involves both the public and private sector, and there is some role for technocratic solutions. If you want to solve healthcare in the United States, you need to appoint an engineer, but that’s not the attitude we have. The attitude our political system has is that it’s not a huge issue. People generally are not focused on how engineers can better our healthcare system.”
6:37: Question from audience: How much of your success might you attribute to blind luck?
6:37: “You know, people always say they are either brilliant or unlucky. I think I’ve been quite fortunate, and I was certainly in the right place at the right time. It’s hard to evaluate how much luck has played into it. I do have a bias that it’s not the best way to approach these things. When I look at investing, that’s almost always a formula for not working. When you think of the world as a set of lottery tickets, you set yourself up to lose. Some failures are due to pure laziness, and when you don’t do your best you set yourself up to fail.”
6:42: “You talk about how higher education is often worthless. What do you think the solution is?”
6:42: “There are a couple of bubbles present in the United States. We do not live in the age of miraculous progress. The question we have to ask is why there are so many bubbles? It seems that people are so bought into the idea of rapid progress, and I think we have a serious bubble in education. People believe that human capital is the best thing you can invest in, but people fail to ask what the return on these investments are. Like the housing bubble, the higher education bubble also has many flaws. I think how it all ends is quite hard to say, but how these bubbles end is that people start thinking for themselves. The education bubble is the result of something that’s overvalued, and what they see as the solution to societal problems. A mistake I made in my life was never thinking about why I’m receiving an education. In retrospect I would try to think harder about why I was doing it, instead of doing it because I was expected to.”
6:45: “What are the most important things we can do as parents, teachers, and mentors to develop and produce young innovators.”
6:45: ”The best way to learn is to be interested in what you’re doing and learning, so I’d say intrinsic motivation is best. If you think of education as a tournament, you will not think to let your kids skip grades. If you think of it as learning, you’d let your kids skip as many grades as possible.”
6:49: “I don’t think nuclear power can be completely deregulated. It is something that requires at least some level of regulation, but there are important questions about how heavily it gets regulated. If it takes 20 years instead of 4 years to build a plant, that’s a problem.”
6:57: Thiel argues that government should prioritize technological innovation. “If Einstein sends a letter to the White House, it would get lost in the mail room and be treated as a joke. In the late 1960s, Kennedy focused on the space program and didn’t dedicate money to healthcare. Can you imagine the government doing that today?”
7:03: “There isn’t much innovation in K-12 education. What do you think of more entrepreneur spirit towards education?”
7:06: “The question is how we get talented teachers to teach a larger amount of students. There hasn’t been much technological innovation directed towards that goal, but I think we could be working towards it. We don’t ask very often how we do more with less. I think it’s a very useful question to ask, both in terms of health care and education.”
7:08: Why did you decide to sell PayPal?
7:10: “We had massive competition in eBay, VISA, and Mastercard. I do think that when a decision gets made to sell a business, you often make the decision to stop the innovation cycle. I often question how companies get founded and how long they last. The founding period is when you have innovation, and after that it runs like any other business would. Businesses led by founders are able to innovate, and if you are in favor of innovation, you have to avoid selling business for substituting someone other than the founder and the CEO.”
7:12: Audience joins Niall Ferguson in thanking Peter Thiel for this great conversation at the JFK Jr. Forum, here at the Institute of Politics.