Peter Thiel explains why the best founders differ from professional CEOs. He uses Facebook as an example: when Yahoo offered $1 billion in 2006, Mark Zuckerberg turned it down at age 22, preferring to keep building rather than cash out. Founders succeed because their visions are tied to their identity, not just their résumé.
Questions this video answers
2006 (two years after Facebook’s founding).
About 22 years old.
$1 billion.
Approximately $250 million.
About eight hours.
Chapters
You wrote a book which is coming on a 10 year anniversary and by the way, I reread it and it stands up in a very big way. It is called Zero to one. And you wrote the. The lesson for business is that we need founders. If anything, we should be more tolerant of founders who seem strange or extreme. We need unusual individuals to lead companies beyond mere incrementalism. And I'm curious about how you think over the years you have found these individuals, what it is that has made these individuals as successful as they have become.
If there was some simple magic formula, this is what a founder looks like, and you invest in this category of people who's a founder, it probably gets faked or you end up with all kinds of really fake ideas. I think a lot of the, the great companies that have been built over the last two decades were founded by people where it was somehow deeply connected to their identity, their life's life project. They had some kind of idiosyncratic, somewhat different vision of what they were doing. They did something new and then they built something extraordinarily big over the years. And of course these sort of extreme personalities often have a lot of blind spots and there sort of are all these, you know, ways in which it's a feature and there are ways in which it can be a little bit buggy, but it's sort of a package deal. And I net out to it being massively advantageous versus, let's say, a professional CEO being brought in. The prehistory of this, I would say would be in the 1990s. The Silicon Valley formula was you had various people found the company and then you'd replace them as quickly as possible with professional CEOs, professional management. And there are variations of this that happened with Netscape and Yahoo and even Google in the 2000s. When the millennials founded the companies, they were given more of an opportunity and it made a big difference. The Facebook story I always tell Is it was 2006, two years in, Zuckerberg was like 22 years old and we got a $1 billion offer to sell the company to Yahoo. We had a board meeting, there were three of us, and you know, we thought we should at least talk about it. It was a lot of money. Zuckerberg would make $250 million and sort of an eight hour long discussion. And he didn't know what he'd do with the money. And he just started another social networking company, kind of liked the one he had and didn't know what else he would do. And so he really didn't want to sell. If you had a professional CEO, it would have just been. Man, I can't believe they're offering us a billion dollars. And I'm going to try not to be too eager. We better take the money and run.
