“Competition is for losers” Peter Thiel

If you want to create and capture lasting value, look to build a monopoly, writes Peter Thiel.

Based on the lecture from Peter which he taught in Stanford a year ago we talked about the value your company creates and how to capture this value in the first part of our course “How to Start a Startup”. That simply means, are you in a perfect competition or are you a monopoly? On which site do you see your company? What do you focus on? Do you compare your business with competitors and try to find better solutions than they do? Or do you keep focusing on the niche market you identified because you know your product is going to create a demand? 

I totally agree with the fact that competition is good for our markets, because it forces businesses to get better in what they are doing to stay ahead of competition. Even in my personal life I’m competing because I compare myself with people around me and strive to beat the ones who are doing better than me. That makes you grow!

When we talked about monopoly, we do not mean the resource-based industries which control prices by regulating the amount of vital resources. We are interested in creative companies that give customers more choices by adding entirely new categories of abundance of the world, was one of Bala’s points. Let us take Google as an example. How do they see their business? Would you say that this is a monopoly?

Probably most of the people would say “sort of, yes…” and that is obvious, because they own 89,6 %  of the internet search engines market in July 2015, followed by Yahoo with 3,4 %. 

What if Google is not just a search engine? Suppose we say it is an advertising company – that would change things immediately!  The size of this global market is not just a few billion, it is half a trillion – around 8 times Warren Buffets’ net worth.

In addition, no one would say that Google is doing something illegal or it reached this position because the governments pushed it. In 1998 when Google was founded, it was going for a small market, but by now it has taken the whole market over year-by-year and has found ways to expand country-by-country. Again, it never focused on competitors and when Google started there were already 20 search engines, but Google focused on developing its concept of search in the www.

In the second part of the lecture, we visited the QuizUp HQ in Reykjavik and attended a talk about the android technique behind the game and social network apps which they are creating. It was interesting to explore a startup office and to see how colourful and homely everything was furnished. The talks were very theoretical and focused on the programming part, not really my topic, but socialising and networking during the event was very interesting.