Masters of Scale: Escape the competition with Peter Theil
Peter Thiel, co-founder of Paypal, says competition will make you at best, a winner at a losing game. If you really want to win, invent a new game and master it. And whilst you're at it, aim for 'escape velocity', or in other words, grow very very very quickly. Monopoly for Thiel is merely the absence of competition - what is a patent, if not a government-backed monopoly?
POINT OF THE POD.
An original idea only buys you a grace period from the competition. As soon as it works, you have a target on your back. Therefore, try and do something with an intense use case that customers really like. This will protect you up to a certain point. Competition is more tolerable if customers have an intense attachment to your product?
MY INCOHERENT SCRIBBLES
- When competing intensely on something you often become very good at the thing you are competing on, but don’t ask enough critical questions about whether the thing you are competing on is worth it.
- Conventional competition - the conventional way of competing means everyone does conventional things and then even when you win, it’s only marginal and you end up having to sell your soul.
- Competition will make you at best, a winner at a losing game. If you really want to win, invent a new game and master it/
- Your first users are less glamorous than what you imagine. They may prove more valuable than you initially seem. But they become a new use case.
- eBay were annoyed. PayPal accelerated eBay’s SALES CYCLE. But who were PayPal to siphon off eBays business? So began the frenemy dance.
- Monopoly is better thought of as absence of competition. What is a patent if not a monopoly backed by the government?
- There is always opportunity in a crowded market. You do not have to be a singular owner in a market to be successful. Differentiate - create a unique product that grabs the customer, drives high conversion, and thus loyalty. You’ve got them! Psychological foot hold.
- Your most dangerous competitors are rarely your competitors. Ebay took more than a year to roll out billpoint.
- If you can scale first you will achieve an escape velocity from the black hole that is hyper competition.
- Compound interest is the most powerful force in the universe. So long as your start up is hitting escape velocity, anyone will understands the power of compound growth will fund you.
- Escape velocity is relative. Your fastest competitor dictates how hard you hit the gas.