This assignment is designed to familiarize MBA students with Thiel’s upside-down world. It requires students to examine both Thiel’s perspective and the conventional wisdom critically. In a disruptive age, managers must think seriously about handling the disruption by thinking disruptively.

  1. Peter Thiel is a contrarian who supports contrarian thinking and action. He believes that many of the standard lessons we are taught at school yield mediocre performance at the individual, group, enterprise and national level. The highest performing students at prestige universities, such as Stanford University (Thiel’s alma mater) are molded into being conformists – often the top students go into high status, high paying fields such as law, consulting and finance – careers that do not add value to the economy or society. One of his most controversial views is that competition is not generally good for individuals, groups, enterprises and societies. This view goes against the most basic precepts of economic and financial thinking.
  2. Explain Thiel’s critique of competition. Do you agree with his perspective? Why or why not?
  3. Explain Theil’s statement that companies should strive to become monopolies. Do you agree with his perspective? Why or why not? Please illustrate your points with examples.
  4. One of Thiel’s recurring themes is that great companies have secrets. What does he mean by this? How do the secrets contribute to superlative performance? Please illustrate your points with examples.
  5. Thiel devises a simple framework for predicting an enterprise’s future performance. He asks: 1) Do the enterprise’s leaders and employees have a perspective on the business that is definite or indefinite? 2) Do the leaders and employees have a perspective that is optimistic or pessimistic? Bottom line: there are four distinct combinations of these perspectives: definite-optimists, indefinite-optimists, definite-pessimists, indefinite-pessimists.
  6. Briefly describe the characteristics of each of these four outlooks. Please illustrate your points with examples.
  7. Which outlook is best-suited to establishing a start-up that can grow into a great enterprise? Explain. Please illustrate your points with examples.
  8. What is your opinion on Thiel’s framework? Does it make sense to you? Why or why not? Please answer this question in a business context (no gut feeling, non-specific responses, please).
  9. When examining new ventures to see whether they merit support from his venture capital company, Thiel raises and answers seven questions about the initiative:
  • The engineering question: Can you create breakthrough technology instead of incremental improvements?
  • The timing question: Is now the right time to start your particular business?
  • The monopoly question: Are you starting with a big share of a small market?
  • The people question: Do you have the right team?
  • The distribution question: Do you have a way to not just develop but deliver your product?
  • The durability question: Will your market position be defensible 10 to 20 years in the future?
  • The secret question: Have you identified a unique opportunity that others don’t see?
  1. Which of these questions apply to the full gamut of non-trivial new ventures needing investment dollars, from establishing a trendy restaurant to starting a computer security business to coming up with a truly innovative product that has the potential to move markets? Explain your rationale.
  2. Think about this list of questions. There are some notable questions missing that are usually viewed as important questions investors should ask before investing in a new venture. Identify two. Why do you think Thiel doesn’t include them in his list?