There are few figures in Silicon Valley who have been as influential, or as controversial, as Peter Thiel. The PayPal co-founder was the first outside investor in Facebook, then co-founded Palantir, and then became tech's premier venture capitalist--and that was before he distinguished (or, depending on your point of view, disgraced) himself by becoming and early and vocal supporter of Donald Trump.
My book, The Contrarian: Peter Thiel and Silicon Valley's Pursuit of Power, explores the entrepreneur's career and ideology and tries to reckon with his impact. Even if you find Thiel's politics, and the impact of many of the companies he's had a hand in, troubling, it's impossible not to also appreciate his brilliance as an investor, prognosticator, and power broker. Thiel has been consistently prescient--even if he's at times failed to capitalize on his foresight. Here are a few of his bets that have surprised me most.
Thiel is the ideological godfather of crypto
PayPal is widely seen as a pioneering e-commerce company, but PayPal was also a pioneer of the extreme libertarian philosophy espoused by crypto entrepreneurs and enthusiasts. The company took off thanks to its association with eBay, but that success was largely accidental. The original vision--promoted by Thiel and a staff largely drawn from the Stanford Review, the right-wing student newspaper he founded while he was an undergraduate--was to create a currency that would be outside the controls of nation-states. In other words: Bitcoin.
Thiel called the 2008 financial crisis
Thiel's track record as a hedge fund manager is remembered as being mostly disastrous--and it was. His fund, at one point, was worth billions of dollars, and Thiel was hailed by the financial press as the next George Soros. Amazingly, it was at this point that Thiel called the 2008 crash--encouraging employees to prepare for banking failures by withdrawing huge sums of cash. The prediction was on the money, but Thiel nonetheless mistimed his trades, betting on a recovery after the crash, rather than sticking to his original thesis. Lesson: Predictions are worthless unless you can take advantage of them.
Thiel bet on Trump when he was most toxic. It paid off
Thiel famously endorsed Donald Trump at the Republican National Convention, but he didn't donate money to the election effort until mid-October, just after Trump's boasts about sexual assault to Access Hollywood leaked publicly. Most pundits--and many in the Republican party--assumed Trump was cooked, but Thiel, as I report in the book, was encouraged by advisers to "double down." The plan may have been cynical, but it worked. Thiel helped revive Trump's candidacy and was appointed to an influential position on Trump's transition team.
The conventional wisdom says Silicon Valley prizes free thinking. Thiel's network prizes conformity
This one was especially surprising to me because Thiel has been a longtime critic of so-called "political correctness," at universities and elsewhere in society. But despite his ideology, Thiel has surrounded himself with people who think almost exactly as he does. The PayPal Mafia grew out of the Stanford Review, and Thiel's companies, according to former employees and longtime associates, are ideologically homogeneous. Of course, there are limits to this approach, and I think some of Thiel's failures can be ascribed to the decision to surround himself with loyalists. But the approach has inarguably helped make him rich. Mafias may be distasteful, but they can work.