The Peter Thiel Question
A test of character, tactical bet or commentary on the relationship between progress and the collective?
In 2014, Peter Thiel (of Facebook angel investor and PayPal notoriety) published his second book (1) Zero to One: Notes on Startups or How to Build the Future. Within the work we, as readers, were presented for the first time formally the now well-known "Peter Thiel Question" (PTQ).
"What important truth do very few people agree with you on"; or "Tell me something that is true, that very few people agree with you on"
Zero To One, P. Thiel
Having spent a foolish amount of time meditating on the purpose of Peter Thiel's question as it pertains to the interview context, I wanted to share a few framings in which I view it.
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Thiel's book is, in essence, a long-form attempt to answer his own question. Within the title, he presents his theory about what is held as supreme orthodoxy in start-ups (i.e. copying businesses that have succeeded is the secret to building a successful new venture), and his contra-position on the matter (i.e. the truth being that copying is not innovation and building new things is what leads to the success of a new venture). Few realize in reading Zero to One - enthralled with captive hope of a divine revelation from the sacred start-up text - Thiel's aim is in curbing the myth of prescribed secrets entirely. Throughout the book, Thiel attempts to disarm, or at least provide continual courtesy disclaimer towards, the naive fanaticism of secrets. That is, while all businesses are built on secrets, there are likely no generalizable secrets to building a phenomenal business. Unfortunately, I do not think it helps much, but I've digressed.
At first glance, the PTQ seems a mere curiosity - perhaps even a stupid question (2). I wonder, however, whether the multi-dimensional intent of the problem Thiel poses is ever really discussed (3). It is said that a hallmark of beauty in an idea can be measured by the substance of its claim in relation to the parsimony in length of expression. Perhaps this is why certain pieces of classic literature possess a near-magnetic quality to them, especially the deeper they touch upon the human condition; To be able to paint all the hues of human nature, struggle and condition within but a four-hundred-page story is no small feat, surely. Within this note and in that same spirit of inspection, let us take our scalpel and work away at Thiel's question to understand what first remains unseen in its anatomy.
Thiel's Question as a Test of Character
"There are many here among us who feel that life is but a joke. But you and I, we've been through that, and this is not our fate, so let us not talk falsely now, the hour is getting late."
All Along The Watch Tower, B. Dylan (1967)
At first incision, the obvious anatomical contour readily seen is the question's charismatic ability to filter the character of an individual.
The basic nature of a start-up is a hypothesis made about a potential adaptation (manifest as a missing product or system) for organisms in the economic ecology. This adaptation, when properly available, is speculated to rapidly assimilate as an advantage in the fitness landscape. In seeing this, the start-up becomes a vehicle on a rapid voyage in exploration toward the truth of their proposed adaptation (4).
Recall that, in similarity to the environments from which technical truths are excavated (5), the market is a natural force that is wholly indifferent to what is considered "untrue" to its incentives (6). In such an environment, it is necessary to form a group of individuals that are aligned, in tenacity, towards the disheartening quest of obtaining a seemingly valid inference from the beast (i.e. product market fit). It would seem, therefore, that anything but aiming for determining the question of truth in whether the business aligns with the market's desire, is antithetical to the raison d'être of a start-up. For, if the decisions and choices the team produces are met with continual failure in proving market value, the business' proposed adaption will be selected out. In fewer words, the product keeps sucking and the business dies. It is no surprise then, that start-ups attract quirky personalities - being aligned to truth in this way is not necessarily an agreeable quality to all. As such, Thiel's question acts as a first basic filter to determine the character of a potential hire.
The PTQ as a test of character in an interview works by setting the stage for an onerous dilemma. A candidate must choose between a commitment to truth-seeking that may, by the very essence of the question, upset the interviewer, and the desire to present an appealing image for which, it is believed, an employment offer may transpire. As such the individual, should they choose to side with the truth, risks a potential employment opportunity by upsetting the interviewer, nullifying all time investment into the process thus far. On the other hand, should they choose to fib, in this instance providing an answer which fails to meet the desired criteria, they demonstrate a feebleness to the interviewer that may be counted critically and provide a reason for rejection. Which is the right choice? Perhaps now you see the dilemma too.
Another property of the PTQ as a test of character is as a measure of intellectual curiosity and rigor of the individual. Supposing it is fair to assume that novelties can be found at humanity's epistemic frontiers (7), to harbor a truth that satisfies Thiel's demand, the individual must necessarily have both the curiosity to venture out to these frontiers and the rigor to study and understand it enough to discover a novel idea. These qualities, when applied to the hiring process of start-ups, could be exceedingly valuable because operators must assimilate massive troves of information and possess the necessary intellectual faculties to distill and produce insight from them. Therefore, it would seem Thiel's question is at first sight an exceedingly strong filter of intellectual character.
Figure 1: A (poor) illustration of epistemic frontier
Thiel's Question as a Tactical Bet
So all you rovin’ gamblers, wherever you might be
The moral of the story is very plain to see
Make your money while you can, before you have to stop
For when you pull that dead man’s hand, your gamblin’ days are up
Rambling, Gambling Willie, B. Dylan (1962)
The second frame in which we can inspect the anatomy of Thiel's question is as not a question, but instead a shrewd bet of a hiring tactic.
As put by the former CTO and initial entrepreneurial force behind the inception of PayPal (8), Max Levchin notes the challenge of hiring engineers for an early-stage venture:
"It's extremely difficult to hire engineers in the early stage of a company because engineers are natural skeptics. When you explain your idea to them, they will think it is stupid and tell you so, because it probably does sound stupid. So you cannot get them interested with just the idea, you have to sell them on the adventure"
The Founders, J. Soni (2022), paraphrased
With hope for eternal forgiveness from the reader in my paraphrasing of the quotation above (among other things I'm indebted to them for), Levchin makes obvious the problem for any employer in the question of hiring brilliant people. By default, a new venture's existence, mission, and fanciful vision of the future will fall on the deaf ears of those who are talented and have many options for employment. As such, the "scrappy" character of a start-up considered, we can view the PTQ as a calculated bet placed in the interview process to neg an interviewee into a less confident position.
Using a tactical question that benefits from depth in contemplation, can function to throw an interviewee off their game causing a downgrade in the self-evaluation of their skills and ability. This is because, as Thiel makes evident, great businesses are built on secrets; If you had a profitable truth, why would you be seeking employment, it would be more rational to exploit it rather than share.
However, consequential to the candidate seeking employment, they effectively admit to Thiel that they do not have the intellect or rigor to find such a truth. Being the case, they may not possess the intellect or rigor to perform the role for which they are applying. This must be disheartening for the candidate. In such a fever of doubt, a skilled salesperson could leverage this anchor point as a means to bolster the proposition of the company's employment. If Thiel's question is indeed a mere sleight of hand gamble in hiring, it is clever.
Thiel's Question as Commentary on Relation Between Technological Progress and Society
Come gather 'round people, Wherever you roam
And admit that the waters around you have grown
And accept it that soon you'll be drenched to the bone
If your time to you is worth saving
Then you better start swimmin' or you'll sink like a stone
For the times, they are a-changin'
The Times They Are A-Changin’, B. Dylan (1964)
A third angle we can view Thiel's question is from more reserved and philosophical interpretation. That is, the PTQ is not an objective question, but an inquiry about the individual and commentary about the nature of technological progress as it relates to society.
Fundamentally, the idea of "the future" implies a hypothetical state that, through the application of a transformative novelty, mutates the present state of society - disturbing its equilibrium in the process. If one subscribes to the notion of history as progressive, such disturbances are characteristically denied and resisted at first. Over time, however, if the novelty has value, it seems to sweep through and consume the present state. Therein, the society re-stabilizes itself at a new equilibrium point inclusive of the innovation (9).
The PTQ inquires into an individual's consideration about the dilemma of the future; the capacity to logically hold within consciousness two intensely contradictory ideas: what is currently present and what can be at a future time. The mutual disagreement between these two states causes intense frustration to those who, seeing their conceptual future as the true direction of humanity's progress, negotiate, in contempt, with the present state of the world. To receive first-hand education in this, I might recommend speaking to an ambitious entrepreneur who will have no qualms in expressing how things move too slowly in business.
Equally within Thiel's question is also a commentary about the relationship between progress and society. Here we come to see Thiel pointing at the horizon, perhaps a demonstration that new ideas often appear too far out or taboo (synonymous with bad morality or living falsely) for the collective. Consider, if only, the historical adoption of the automobile and the so-called Red flag laws that were enacted in the late 19th century in the US and UK. These laws required drivers of early automobiles to wave a red flag in front of the vehicle as a warning to oncoming livestock of its impending arrival. This example demonstrates, in some parts, the alienation of early automobiles from the contemporary state of society. Though eventually, the automobile became the modern means of transportation; there is something to be said about the future being stranger than anyone excepts. From this example, we can see in small part the rough terrain which represents our relationship as a civilization to progress.
If Thiel intended to state his perspective about the nature of progress and observe the reaction of a candidate, it would be advantageous to demonstrate how and why the present and future can be unified.
In closing, Thiel's question is curious in so far as one is willing to consider the different facets it attempts to uncover about both the character of an individual and their relationship to the future. I'm pessimistic as to whether any interviewers consider the full breadth of the question's cartography (this is with some skepticism towards the validity of the maps I have drawn in the sections above), however, it continues to be an unusually valuable tool for contemplation nonetheless.
(1) His first book published with co-author David Sacks The Diversity Myth: Multiculturalism and Political Intolerance on Campus
(2) All interesting questions are stupid questions.
(3) Or if it is, the author has not yet read about it. Shame on this author! Bad, bad, author.
(4) This is nothing groundbreaking and merely summarizes the basic thesis of Eric Reis' title The Lean Startup.
(5) See Balaji Srinivasan on Technical Truths
(6) In other words, if you build a bad business the market will tell you that you are wrong and your business will die. Sorry, no re-dos.
(7) Here, imagine that all "knowable knowledge" in reality is encapsulated in a circular area covered by a black fog of ignorance. The epistemic enclosure of humanity represents the area in this circle where the fog is not present. The frontier represents the perimeter of this circle. It may be the case that knowledge is not interdependent and that all human knowledge is not contained in this area, however, for rhetorical reasons I assume so.
(8) Recall that it was Levchin and Luke Nosek who initially started Confinity and sought angel investment from Peter who later become CEO of the enterprise. For a more detailed historical account see The Founders by Jimmy Soni.
(9) To provide a modern example, consider the near necessity of smartphones given the digitization of various public and private services across the world.
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