Peter Thiel: “If you are in favor of innovation, founders have to stay in control”

I think the founding period is the period when you have innovation. And once that's over, it sort of becomes a normal business that runs in a bureaucratic, mechanistic sort of a way. And it's a very important question, how long can one enable the founding in these companies to last? The classic example where people sort of cut the founding off too early, I would argue, would be Apple. The judgment call the board at Apple in 1985 made was that computers were like Pepsi. It was just a marketing thing. There was going to be no more innovation in the computer industry. You could get rid of the founder and you could replace the founder with someone who'd run the business in a much more predictable, mechanistic sort of a way. And that turned out to be a bit of a mistake. It's unusual for the founder ever to come back once these mistakes are made. Sort of miraculously, Jobs came back, and then you saw another 14 years of innovation. I do think the businesses that are led by founders are the ones that are able to innovate. The ones that are not led by founders are generally not able to innovate. And if you are in favor of innovation, you have to figure out ways for founders to stay in control as long as possible and to avoid selling a business or substituting someone other than the founder and a CEO.