Peter Thiel

Zuckerberg opened the 2006 board meeting by saying that Yahoo's 1 billion dollar offer was obviously a formality and that Facebook was turning it down. Thiel and his fellow board member Jim Breyer made him argue it for six hours anyway, and Thiel still calls that decision the most important in the company's history.¹

Peter Thiel is the co-founder of PayPal, an online payments company, and the co-founder of Palantir Technologies, a software company that builds data-analysis and intelligence platforms used by governments and large enterprises. He also became the first outside investor in Facebook and an early investor in SpaceX, and later wrote a widely read book on startup strategy. He is best known for arguing that valuable companies are not incremental improvements on existing businesses but singular, hard-to-copy creations.

Background

Thiel was born in 1967 in Frankfurt, West Germany, to Klaus and Susanne Thiel. His father worked as a chemical engineer for mining companies, and the family moved frequently, including stretches in South Africa and Namibia, before settling in Foster City, California, in 1977. He excelled at mathematics, won a statewide math competition as a middle schooler, and became a competitive chess player who reached the rank of master. He graduated as valedictorian of San Mateo High School in 1985, having developed an interest in Ayn Rand and in conservative politics.

Thiel studied philosophy at Stanford University, graduating in 1989, then stayed on for law school, earning his degree in 1992. As an undergraduate he co-founded The Stanford Review, a conservative and libertarian student newspaper, in reaction to changes in the university's undergraduate curriculum, and shortly after law school co-wrote The Diversity Myth with David Sacks, a book about alleged political conformity on campus.

Getting started

After law school, Thiel joined Sullivan and Cromwell, a large New York law firm, but left after seven months and three days, later describing the experience as one where "on the outside everybody wanted to get in; on the inside everybody wanted to get out."¹ He worked briefly in derivatives trading before returning to California, where he ran a small hedge fund and began angel investing.

In December 1998, Thiel co-founded Confinity with Max Levchin and Luke Nosek, initially building security software for handheld devices before pivoting to digital payments sent by email. In March 2000, Confinity merged with X.com, an online financial services company Elon Musk had co-founded, and the combined company was renamed PayPal in 2001. Thiel served as PayPal's chief executive until eBay acquired the company in 2002 for about 1.5 billion dollars, a deal that made Thiel and several PayPal colleagues, later nicknamed the "PayPal Mafia," independently wealthy and positioned to found or fund the next generation of technology companies.

What he built

With part of his PayPal proceeds, Thiel became an angel investor. In August 2004 he invested 500,000 dollars in Facebook for roughly a 10 percent stake, making him the company's first outside investor and a board member; the stake, sold down over subsequent years including after Facebook's 2012 public offering, ultimately returned more than a billion dollars. In 2005 he co-founded the venture capital firm Founders Fund with fellow PayPal alumni Ken Howery and Luke Nosek, which went on to back companies including SpaceX and Stripe.

In 2003, Thiel co-founded Palantir Technologies with Alex Karp, Joe Lonsdale, Stephen Cohen, and Nathan Gettings. Palantir builds software, internally called an "ontology," that connects an organization's scattered data into one operational picture for intelligence, military, and later commercial use; Thiel has said the company's tools helped locate Osama bin Laden.¹ Palantir spent roughly two decades doing government and defense work much of Silicon Valley treated as reputationally toxic before going public via a direct listing in 2020, and by the mid-2020s had become one of the more highly valued software companies in the United States; Thiel's remaining stake, around 4 percent, was worth several billion dollars.

In 2014, Thiel published Zero to One, based on a Stanford course he taught, co-written with Blake Masters.

How he operates

In Zero to One, Thiel argues that great companies are not iterations on a formula, that the next great founder will not simply copy what the last one did, and that a business should aim to become a monopoly, the only company doing a particular thing, rather than compete in a crowded field. He describes the founder's task as finding "secrets," solvable problems others have a blind spot toward, and as an interviewer he is known for a version of the contrarian question: what do you believe that most people disagree with.¹ He has said attributing outcomes to luck is a way of avoiding hard thinking, and that a bad plan is still better than no plan.

The willingness to sit inside a decision the room considers settled shows up in his investing as well. When Flexport founder Ryan Petersen worried his market was too large for Thiel's own small-market test, Thiel told him not to be so dogmatic, that a big market was fine, then offered Flexport more capital and better terms than a rival offer that would have ceded board control.²

Where things stand

As of the mid-2020s, Thiel remains chairman of Palantir's board and a partner at Founders Fund, and runs the Thiel Foundation, whose Thiel Fellowship pays young people to skip or leave college to build companies. His net worth, driven overwhelmingly by his Palantir shares, has been estimated at roughly 9 to 16 billion dollars depending on source and date. He has also become an influential figure in Republican politics, funding candidates including JD Vance, who worked for Thiel in venture capital before entering politics and later became vice president. Palantir has grown from a company doing mostly classified government work into a large publicly traded business with a substantial commercial customer base alongside its defense contracts.

Key facts

• Born in Frankfurt in 1967; raised partly in Namibia and South Africa before settling in Foster City, California.
• Studied philosophy and law at Stanford; left the law firm Sullivan and Cromwell after seven months and three days.
• Co-founded Confinity in 1998, which became PayPal after merging with Elon Musk's X.com; sold to eBay in 2002 for about 1.5 billion dollars.
• Became Facebook's first outside investor in 2004 with a 500,000 dollar check for roughly 10 percent of the company, later worth more than a billion dollars.
• Co-founded Palantir Technologies in 2003, which went public via direct listing in 2020.
• Co-founded Founders Fund in 2005 and published Zero to One in 2014.