Review : The Contrarian is the first Peter Thiel biography written. He is an underexamined figure of fascination. I can’t help but had to drop everything else and read this.
It recounts the journey of Thiel from co-founding the Stanford Review to embracing the Trump candidacy. It depicts how the contrarian approach has made him one of the most influential voices among Silicon Valley and perhaps the world. It’s gripping and vividly written that I felt I was right there in the moment.
It’s pretty biased tho, almost like a hit piece. Chafkin portraits Thiel as a villain, and we should all be afraid of him. I see where he’s coming from. Thiel has the money and power to do as he pleases. On top of that, he pushes the envelope, breaks the rules or even doing unethical things like most of the other successful entrepreneurs.
Quotes
He [Thiel] has been responsible for creating the ideology that has come to define Silicon Valley: that technological progress should be pursued relentlessly—with little, if any, regard for potential costs or dangers to society.
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Thiel, according to his friends, is brilliant—capable of visionary insights and with an uncanny ability to know exactly how to win. He has the special ability to see life like a chess game—using his friends, his business partners, and his portfolio companies as means to an end. There was a less appealing side to this, of course. The Machiavellian tendencies could make him coldly transactional, to the point, sometimes, of cruelty.
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To speed things along, Levchin wrote a software bot that automatically messaged eBay sellers offering to buy their items — but only if they accepted PayPal. If PayPal won an auction it would donate the item to the Red Cross, which was good because the plan was a little devious (not to mention a violation of eBay’s terms of service). Levchin wasn’t trying to win the auctions; he was trying to get sellers to sign up for a PayPal account.
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The credit card refund mechanism that PayPal used to return customers’ cash, in fact, was technically banned by the credit card companies. When those companies complained the following year, PayPal simply apologized. “They were like, ‘What the fuck are you doing?’ ” recalled Pearson. “We were like, ‘We’re trying to take advantage of your incredible system to facilitate payments.’
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Today, the use of unsustainable or ethically dubious tricks to get a startup off the ground is widely accepted—even celebrated in some circles of tech—and has been widely credited to the growth hacks that Thiel and his peers developed at PayPal.
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Musk thinks Peter is a sociopath, and Peter thinks Musk is a fraud and a braggart.
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Moritz said, “At heart, Peter is a hedge fund man,” rather than an entrepreneur. Entrepreneurs were expected to pour all of themselves into their companies, to risk it all—financially and even personally—in order to grow as big as possible, and, if you were being idealistic about it, to change the world for the better. That is how Musk saw it. It’s why he has nearly bankrupted himself several times in his career, and why he would tell me that he regards taking money from investors as “not cool.”
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The first night of the conference, June 21, PayPal invited 1,000 attendees to a cocktail party, featuring not only free drinks but also, for each guest, a T-shirt with PayPal’s logo and the phrase “New World Currency” printed on the back. The actual crowd was much larger, perhaps 2,500. The booze flowed and attendees were told that PayPal would be drawing names out of a hat the following day, with a $250 prize. To be eligible though, they’d have to be wearing the shirt in the morning.
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The idea, said Bill Onderdonk, was to “make a visual case for: this is what the community wants.” The following day, when Whitman took the stage for her own keynote, she was staring at hundreds of PayPal logos—roughly a quarter of the crowd was wearing the freebie. It was as if “the users were asking Meg, why don’t you just buy PayPal,” said April Kelly, the company’s head of customer service.
“Peter’s philosophy is pretty odd,” Musk said at the time. “It’s not normal. He’s a contrarian from an investing standpoint and thinks a lot about the singularity. I’m much less excited about that. I’m pro-human.”
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He wasn’t just a contrarian investor with a bankroll in the billions; he was a risk taker, betting on the wildest technologies and most audacious founders, with growing clout in Washington, D.C. This persona would define his career for the next decade, even if it contained obvious inconsistencies: How exactly could a hedge fund guy who was effectively shorting the American economy also be a wide-eyed futurist? What kind of a libertarian sold spy technology to the CIA? What kind of gonzo risk taker says no to an early investment in Tesla? These contradictions, along with Thiel’s vanity, made him vulnerable to anyone determined to expose them, and at that very moment, an upstart gossip publisher, Gawker, was trying to do just that.
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Thiel had spent years carefully crafting different versions of himself and presenting them to different constituencies. To Wall Street, he was the brainy contrarian hedge fund manager; to Silicon Valley, he was the risk taker who cared only about empowering young founders; to Washington, D.C., he was the tech genius who could save us from terrorism.
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The higher education bubble wasn’t just like the bubble in subprime mortgages, he said. It was worse. At least with a subprime mortgage you had a house. With college — even an Ivy League college — you had nothing.
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Thiel’s anti-college thesis was more than just a riff—it was part of a larger strategy designed to expand his influence well beyond investing and tech. It would play out in three new domains: politics, the law, and education.
On the day the company announced it was shutting down, he invited Andregg over to his house, where he mercilessly crushed him in a game of chess, and then used it to teach a business lesson. He pointed out that several turns before he’d gotten Andregg into checkmate, the younger man had more than a dozen possible moves.
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“When you’re deciding what to do next, you should be very careful about making moves, because you’ll end up in a situation where you’re constrained.”
Thiel emphasized competition, and his belief that successful people should do everything in their power to avoid it by seeking to achieve monopoly dominance of a market.
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The New Zealand house, as well as a roughly five-hundred-acre parcel of farmland some forty miles north that he later acquired, wasn’t about partying; as the panic room suggested, it was an escape plan. Like many within his network, Thiel was a bit of a prepper—a term used to describe people who believed that the end of the world, or civilization at least, would take place within their lifetime, so they stockpiled gold and firearms, sometimes in underground safe rooms.
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Working closely with Karp, Chmieliauskas said he had been part of a new approach, which became known inside the company as “Team Rogue.” It roughly meant doing whatever had to be done, even pushing ethical limits. It’s unlikely that Thiel knew about Team Rogue, but Chmieliauskas said that Palantir’s senior leaders certainly did, and in any case Chmieliauskas was following one of the most important rules of the Thielverse: Ignore the rules when necessary.
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He sued the U.S. Army. In a legal complaint, Palantir’s lawyers, led by Hamish Hume of the powerful corporate firm Boies, Schiller and Flexner, argued that the Army, in failing to allow Palantir to submit a bid for the contract for its big software database, had violated a 1994 law that had been passed to prevent overspending by the federal government. According to that law, which had been passed amid outcry over the Pentagon’s supposed purchase of $600 toilet seats, the Army was required to consider cheaper, commercial products wherever possible rather than those that had been marked up by big defense contractors. By setting up DCGS as a consulting arrangement, the Army had cut out Palantir, a commercial product, the suit argued.
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Two years earlier, SpaceX—the Thiel-backed rocket company founded by Elon Musk—had successfully tried the same trick, suing the Air Force after it awarded a contract to a competitor, United Launch Alliance, or ULA. “Everyone said, ‘If you sue NASA, that’s your future customer, and they’ll never work with you again,’ ” Musk recalled. “I was like ‘Okay, they’re definitely not gonna work with us if we don’t sue, so at least there’s a chance they’ll work with us if we do sue them and win.’ So it was a small chance versus nothing.” Musk paired the lawsuit with an appearance before Congress where he noted that ULA used Russian-made engines. The Air Force backed down, agreeing to ensure that SpaceX could bid on its contracts, and the company’s valuation would soar.
Thiel produced a list of 150 names for Trump to consider for senior government positions. Many were ultra-libertarians or reactionaries; others were more difficult to categorize. “Peter’s idea of disrupting government is out there,” said Bannon. “People thought Trump was a disrupter. They had no earthly idea what was being pitched” by Thiel.
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For Trump’s science adviser, he suggested Princeton’s William Happer, the country’s most prominent climate change skeptic, who’d taken up the ultimate contrarian position on the subject. Happer had argued that carbon dioxide was not only not harming the planet but that it was actually good for the earth, since trees need the gas to grow.
This became a pattern: Thiel would suggest some bold and entirely ridiculous name, who would be promptly rejected and replaced with someone more acceptable. For Food and Drug Administration commissioner, he attempted to nominate candidates who shared his belief that the FDA’s main role—regulating trials for drugs—was unnecessary. […]
Thiel had argued much the same, but it was a far out position for a serious candidate to head the FDA, since the agency’s refusal in the early 1960s to approve thalidomide, a sleeping pill, is regarded as one of the great administrative success stories.
In Europe, where a less-regulated market allowed thalidomide to be prescribed to pregnant women, thousands of babies were born without fully formed limbs. The incident prompted Congress to require drugmakers to prove their drugs worked before seeking approval—essentially creating the modern pharmaceutical regulatory regime.P 253, The Contrarian by Max Chafkin
But instead of requiring proof of efficacy through tightly controlled clinical trials, Srinivasan had argued that the FDA could be replaced by a decentralized database where doctors and patients rated their experiences with experimental therapies—a “Yelp for drugs,” he’d called it, referring to the Thiel-backed restaurant-rating service.
”Thiel had tucked his arms under the table to make room for Trump’s broad shoulders and seemed to shrink away from the president-elect, who was having none of it. As Trump spoke, he reached below the table groping for Thiel’s hand, found it, and raised it above the table. “He’s been so terrific, so outstanding, and he got just about the biggest applause at the Republican National Convention,” Trump said, rubbing Thiel’s fist affectionately. “I want to thank you, man. You’re a really special guy.”
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“These guys understood,” said Bannon. “The H-1B visa was a sideshow. China was the issue. They were supposed to be the biggest enemies we got and they’re basically making a nationalistic case.”
This was what Bannon and others saw as Thiel’s most important contribution to the Trump presidency: not the dozen or so appointees, but the ability to get the most powerful and respected businesspeople in America to put themselves in Trump’s orbit—even if they despised him privately.
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“This person said he’d always found the stories about Thiel’s callousness unpersuasive—that is, until before the election. “It definitely changed how I look at him,” he said. “That was the first time I thought the supervillain thread had any credibility.” Others chose to look at Thiel’s bet on Trump as a matter of pure power. He’d realized, one prominent Silicon Valley software entrepreneur said, “I can pay $1 million and have a cabinet position.”
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This in the end was how most of Silicon Valley processed Thiel’s support of a reactionary reality television star: cynically. They chose to ignore his proximity to the alt-right and the ways the white supremacist threads of Trumpism fit with Thiel’s own feelings toward immigrants. These were perhaps the necessary moral compromises made by any real disrupter—and no different from the growth hacking at PayPal, or the privacy violations at Facebook, or the lies that Thiel and his peers had told throughout their careers to hasten the advent of the future. “It almost doesn’t matter if you agree with it or not, he was right,” said former Thiel Fellow Austin Russell, now the CEO of Luminar, which makes sensors for self-driving cars. “If you really want to change the world, you have to have a seat at the table.”
“He’s a nihilist, a really smart nihilist,” said Matt Stoller, the anti-monopoly activist and author of Goliath: The 100-Year War Between Monopoly Power and Democracy. “He’s entirely about power—it’s the law of the jungle. ‘I’m a predator and the predators win.’ ” That, more than anything, may be the lesson that Thiel’s followers have learned—the real meaning of “move fast and break things.”
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Then Thiel moved on to the advice Jobs had given about death. “The best way to take this advice is to do exactly the opposite,” he said. “Live each day as if you will live forever.” Adopting this worldview “means you should treat the people around you as if they too will be around for a long time,” he said. “You will get the best returns in life from investing your time to build durable friendships and long-lasting relationships.”
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