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30 October 2014updated 26 May 2016 12:30pm

Peter Thiel: we must stop fearing the future

The co-founder of PayPal, Facebook board member and hugely successful venture capitalist is disappointed in the future. He doesn’t think we’re ambitious enough.

By Ian Steadman

The Silicon Valley billionaire Peter Thiel – a co-founder of PayPal, Facebook board member and hugely successful venture capitalist – is disappointed in the future. He doesn’t think we’re ambitious enough.

Someone living in 1964 might have imagined that in 2014 we’d be enjoying jet packs and moon hotels. Instead, we have to make do with Instagram and Segways. What’s worse, according to Thiel, is that our “financial and capitalistic” age is not bothered that we’re not doing as well as we should. The premise of his new book, Zero to One: Notes on Start-ups, or How to Build the Future, is that the most advanced economies of the world have been experiencing a four-decade lull in innovation – and that is because we’ve stopped daring to dream big.

Thiel’s ambitions for the 21st century are unusual – he’s an avowed libertarian and wants to build floating cities in the Pacific where businesses can work free from government regulation. As a member of the so-called “PayPal Mafia”, he is friends with the Tesla and SpaceX founder Elon Musk, but lacks Musk’s charisma. Some journalists have compared Thiel to a robot, which doesn’t seem fair, though he was dry and serious when we met at a hotel in central London to discuss his book.

Zero to One is adapted from a class Thiel gave at Stanford in 2012 and is primarily a business text. His theory is that monopolies are good and capitalist competition is bad. He defines success for start-ups as creating a product, industry or science that nobody else has thought of, instead of just besting a competitor.

“As a founder you want to build a new monopoly,” he said. “It may not last for ever but if it lasts for a few decades that’s pretty good. ” He cites Steve Jobs’s launch of the Apple iPhone as a success story.

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Free capital: a winning design for one of Peter Thiel’s floating cities. Image: Andras Gyorfi

The larger picture Thiel paints in his book is that western society lacks “hubris” and is suffused with a psychological malaise he calls “indefinite pessimism” – a sensation in which “you generally have no idea of the future, but it’s vaguely the same to worse”. He believes that people are not only unsure of what the future will bring, they are scared of it.

“You look at the science-fiction movies that Hollywood makes, and they all show technology that’s destructive – it doesn’t work, it kills people,” he said. “I saw Gravity recently, and you’d never want to go into outer space; you’d want to stay on a muddy island somewhere.”

This lack of a coherent vision is holding everyone back, he argues. Unlike many other libertarians, Thiel believes that governments can be a source of innovation, but he bemoans modern bureaucracy and says none of the US government’s previous successes, such as the Apollo space programme, could be repeated today. “Now,” he told me, “a letter from Einstein would get lost in the White House mail room.”

He has a blind spot, however, when it comes to considering who should benefit from a hi-tech future. Although he points out that many successful Silicon Valley entrepreneurs are “white men”, he doesn’t believe this is because the likes of Bill Gates have social and economic advantages. “Luck is just an atheistic word for ‘God’,” he says, a catch-all that “covers up the laziness in our thinking”.

Thiel is a unique figure in Silicon Valley because he doesn’t care so much about making things faster or bigger: he wants to make them better. Although management texts often pose as works of philosophy, Zero to One is a serious read. Above all, it offers rare insight into how one of the few titans of 21st-century capitalism thinks.