Trump, Gawker, and Leaving Silicon Valley | Peter Thiel | TECH | Rubin Report
02:10 "... in Silicon Valley in the late 90s it ..."
14:46 "... in Silicon Valley and we're going to ..."
14:56 "... that Silicon Valley may be what it is ..."
15:06 "... about Silicon Valley I suppose or at ..."
15:26 "... way so I do think Silicon Valley at this ..."
15:42 "... sort of the Silicon Valley 1997 : think ..."
16:35 "... right well I I do think Silicon Valley ..."
16:48 "... but the Silicon Valley surrounding not ..."
17:30 "... everyone in Silicon Valley would be ..."
18:38 "... survey in Silicon Valley it's it's it ..."
19:22 "... in Silicon Valley I'm lying about it and ..."
20:23 "... than they are even in Silicon Valley ..."
29:27 "... Silicon Valley where you have this ..."
Dave Rubin of The Rubin Report talks to Peter Thiel (entrepreneur) to discuss creating PayPal, why he moved his company out of SIlicon Valley, political correctness, the changing media landscape, his company ‘Palantir,’ libertarianism, his views on Trump, his take down of Gawker, and much more.
About Dave Rubin: http://daverubin.com/joining me today is an entrepreneur a venture capitalist and author the co-founder of PayPal the first outside investor in facebook the founder of Palantir and Silicon Valley's ultimate contrarian thinker Peter teal finally welcome to the Rubin report David thanks for having me on the show it's good to be here with you I normally don't have this many cards for a guest but I've got a lot of cards for you today are you ready to roll ready to go all right so we have to start obviously Rogan had Elan musk on last week last week and they smoked a joint so do you want me to put the joint on the table right now or how are we doing this you know mine my number one rule is never to compete with the Elan man oh you know I would never I would never bet against Elan it's it's been like this I've been I was a close partner of his at PayPal in the in the late 90s early 2000s and and after PayPal you know Ilan set out to start these to the you know both the rocket company and the the electric car company SpaceX and Tesla yeah and I think the conventional wisdom on Elon was these were both completely harebrained projects and if one of them had succeeded that you have to sort of question it and when both of them succeeded it suggests that you know he knows something people other people don't all right well that is a matter of luck I'll keep I'll keep the joint right here for a now don't compete with you on all right but look that's a good place to start because first you know it's interesting because we've gotten to know each other a little bit in the last couple years and it seems to me that the person that I know privately is sort of different than the way the media portrays you so I thought maybe at the beginning let's just do a little history about you and then we can get to some of the controversies and some of the ideas that you're really interested and things like that so let's start with with PayPal since you mentioned it already where did the idea of PayPal first come from well you know it's it's when you start one of these companies uh it's it's typically not the case that you get the whole idea fully formed you know instantaneously we certainly there was this incredible internet boom going on in Silicon Valley in the late 90s it felt there was sort of this open frontier open Gold Rush one of the natural things to look at was you know was finance I I was sort of very interested in the cryptocurrency could there be new forms of money there's always something you know super mysterious powerful important about money it was it was it was the way that this this was going to change so we had I think we had this general idea to do something with security with money with payments from very early on of the founding of the company and then you iterate a lot on how to how to get the idea out and the the critical question for any consumer internet product is always not what the idea is but how do you get it out how do you get the distribution out and we spent there been a lot of payments companies Internet payments companies that already started and failed by 1998 there was one called when one called up other cyber cash there were you know there's sort of a variety of these different ones that had tried to create these you know comprehensive currency schemes and they would work if everybody use them but you could never get even the first person to start but the challenge was how to make it viral how do you get something to work where it's good for the first person for the tenth person to the 100th person and once you have millions of people you have a network you have network effects and that was sort of the chicken and egg problem yeah so how did you guys overcome that hurdle well we eventually stumbled on this idea of linking money with email because they were ready 300 million people in 99 that had email accounts and and so if you could send money to an email address you know it send it to your email and then you get an email saying you've received cash and then you'd obviously click on the links and do the work necessary to get the money out and so and so you didn't need both counterparts to a transaction to be part of the PayPal Network only the sender could be part of it and then the recipient the recipient would sign up as they took the money out and and then we started with the 24 people in our office those were the first 24 customers and they sent money to friends and to other people but gave these referral bonuses we gave you $10 who signed up ten dollars you got something to sign up and it just grew exponentially when we were you know it grew about seven to ten percent compounding daily and now if you're you know and you start with a small number if you can get seven to ten percent daily compounding and after about a month year at a thousand people by those mid November of 99 by end of December of 99 it was a twelve thousand by February third two thousand was at a hundred thousand by mid April two thousand was up two million and so so what did you do look in terms of getting people to understand the way you could work with money differently because I actually remember the first time I used PayPal I think it was in 2001 I was a struggling comic I had moved into a roommates little apartment because I didn't have much money and I had but I had to pay him a couple hundred bucks or something a month for for rent and he I was gonna give him a check he said PayPal me and just the idea that I was somehow linking my bank account to something on the computer we didn't even have I don't know if I'm not mistaken I think I was still using dial-up I don't even know that we you know had had Wi-Fi or anything like that but it's about an idea that this can even happen how did you train people to realize well it's this is something that's real and it's always on its is it normally you serve to get people start doing something like that it has to be something where there's an intense need and and maybe it's not too dangerous and so the in one the natural places that started was on the eBay auction site where at small dollar transactions maybe $40 the typical amount and if you send check across the country that's like a seven to ten delay 10-day delay it's slow most people aren't set up to process credit cards you roommate probably couldn't process credit cards and so and so you know but since you could make PayPal payments with a credit card you could in fact send a credit card payment to 300 million people whereas they're only something like three or four million that are set up to process their like hundred fifty million people with emails in the u.s. at the time there may be three million that were set up to process credit cards small businesses things like that so we expanded it by you know 147 million do you remember what it felt like as it started compounding the way you're talking about like what it was like as it was growing and you realize like wow we really have this well you are you're new you're at the forefront of like some sort of revolutionary thing it it's incredibly exciting and it's incredibly scary and it was a is like going to take over the world we're all gonna die and move several times between you know that those two several times a day yeah was there any bizarre pushback from banks or any anyone that was doing financial tradition that was traditionally there were certainly like more than more than our share of challenges you had a you had an enormous problem of fraud where people just figured out ways to hack the system and steal money mm-hmm and then and you can't simply get rid of fraud because you always get rid fought it and make it cumbersome but it's easy then it's also easy to defraud so your challenge was how do you get it to be easy to use but hard to defraud and that took it took some time there on certainly banks didn't like there were you know they're all the the incumbent players that that didn't like something new and then of course it was sort of in this in this strange regulatory zone where you know was a new form of payments a new form of moving money and and you know the way often thought of it at the time was that we were in a race between technology and politics and you know the politicians didn't like us but if we got the system the PayPal network to be big enough it would sort of overwhelm the regulators and they'd have to accept it as a fait accompli so the libertarian party you must have loved that concept like you were actually doing something that libertarians or suppose there was a early 2000 conversation you know one of the one of the execs at PayPal said that you we need to hire a whole bunch of lawyers else what we what we can do or can't do else we can't do so we have to just go ahead and not hire the lawyers and just just do it yeah now you know the the sort of uh I I actually I do not know if a company like PayPal could have been started even two three years later so you know in the in the aftermath of 9/11 we got the Patriot Act in the US and that that attached you know much more regulatory scrutiny to to financial transactions to payments that no your customer rules became much much trickier and so so I do think that there's a weird way in which there was an opening to start a business like PayPal in 1999 2000 even three years later I think it might not have been possible yeah and it's so cool to me just knowing a lot of your ideology and the libertarian ideas you care about and just going ahead and building what you want to build instead of waiting for other people to do it I mean you actually did it and and that's a pretty pretty great thing well it was it was um it was sort of the sense that you know we were gonna change the world we're gonna know give people more control over their money we had all these ideas about you know getting rid of central banks and creating a new currency we never quite you know got to the Bitcoin ya stage of it we'll get to that later but but certainly certainly these ideas were you know we're incredibly motivational in doing it and it is always a little bit of a contrast from you know I always have this view on politics where it's both you know incredibly important and then in many ways incredibly frustrating yeah as it's so on it's like the air we breathe that permeates our whole system and then it's also so hard to ever change you know as a as a college student I started you know this conservative libertarian newspaper and Stanford the stanford review and and there's a lot and it's important to have debates to discuss things and then it's often so hard to change things indeed the the PayPal hack was in a way and we're gonna stain the world we're gonna ask for permission yeah you know we're just tech technology over politics well speaking of changing the world let's flash forward a couple years so we're just doing some business background first before we get to a lot of your ideas of the day you were the first outside investor in facebook 500 grand to this Zuckerberg I did you know him well before that had you guys communicated a lot how did that even come to pass not really was the sort of actually literally the first day we met we thought wow he for an hour we came back and we gave him the term sheet about an hour later so it was how was it was a fast decision I think I think people always have the sort of Shark Tank image of these things the exam sort of you know super sophisticated pitch and you could say just the right things right that's what works and I was nothing of the sort and he was a he was a you know kind of introverted 19 year old you know sophomore between sophomore junior year summer summer too 2004 and and and the the main and and and and and the main thing I'd going for was it was just growing fast they were they were at something like twenty college campuses they had about a hundred thousand people on the network and they just needed more money for computers because there was such a demand for for the product is they were gonna launch at more colleges in the fall so as that would appeal to you more than the product itself just that you saw engagement was already it was already working yeah um and then but I would I would say the other the other part of it was that there was like a prehistory to it so one of my one of my good friends from PayPal back from Stanford's guy named Reed Hoffman he started LinkedIn later years but and he'd worked with me at PayPal in the late 90s early 2000s but before that he had started a social networking company back in 1997 seven years before Facebook and they had they already had you know they had social net was the name of the company so there's social networking in the name of the company seven years before and there were all these things that they had they had thought about doing so I was gonna be you know it was gonna be you're on the 1990s version of social networking was we're gonna have these avatars in cyberspace and I might be a cat and you might be a dog and virtual cat you're a virtual dog we have to figure out how we relate and it turns out people aren't weren't really interested in that they weren't really interested in since of a fictional an online persona it was much more about real identity and and somehow Facebook was the first one to crack the problem of real identity where you know even those always a little bit curated certainly for the most part people on Facebook are who they they say they are yeah for the most part at least so am I mistaken you're the only person who's been on the board of Facebook the entire way out except for mark right right right since the beginning yes yeah what can I ask you about that that Facebook won't get too angry about if I ask you well just what's the experience like of being a but you're part of a board from the beginning of really the thing of the internet what seems to drive conversation the most on the internet well there's um you know there's I mean it's it's been sir like this incredible trajectory you know uh where it's it's it's gotten probably much bigger than I would have thought possible at the time you know I was you know I was incredibly optimistic and bullish on it's certainly back in back in 2004-2005 I think that I think that one one kind of perspective for a lot of the world-class entrepreneurs is they're not specialists there there's something close to polymaths and so you know if you have a conversation with Mark Zuckerberg he'd be able to speak you know with with you know surprising amount of understanding about a lot of things so we could speak about the details of the Facebook product you could talk about you know the way people think about social media the psychology the the way the culture is shifting the management of the company has ideas on that his ideas on and then how this fits into the bigger history of technology and so it's uh you know it was sort of an academic view is often that you're like a sort of a narrow expert on one thing mm-hm and that's what you do and and what it is about it's it's much more sort of this this polymath like intellect to understand all these different things the kinds of board conversations we've had over the last you know 13 14 years have it's just been this crazy range yeah it must be particularly interesting for you though as sort of the outsider in Silicon Valley and we're going to talk about you why you moved down to LA and all that stuff that you've been there the whole time that it's not you know they didn't for all the reasons that Silicon Valley may be what it is you weren't ever booted off the board or anything like that they've they've let you be the contrarian guy there so that that actually must that's a good thing about Silicon Valley I suppose or at least within the little microcosm that you sit in right no I I you know I I don't experience you know a great deal of hostility to me personally you know people you know it's it's it's you just you you always you know it's it's it's sort of manifests in all sorts of other way so I do think Silicon Valley at this point has a bit of a conformity problem it has you know a bit of a way in which people are - too much all thinking the same way it's just like the there was you know the the Apple I saw this this meme on the internet the other day where was sort of the Silicon Valley 1997 : think different that's the look in valley 2018 : think the same yeah and and so there is something that's uh that's gone that's gone a bit wrong even though you know it's it's I'm hard-pressed to cite things were you know it's really affected me personally yeah all right well I was actually gonna push that to a little bit later but let's just stay with that for now then do you remember moments did you see some markers along the way where you realized some of this groupthink was affecting the actual products where where the actual ability to create new technologies or new products where that was actually causing stagnation because I sent I said it's been sort of a long road to get here but you have sort of been talking about this for a while now and I think there's a direct connection to the diversity myth which we'll also talk about what you wrote you know twenty years there great right well I I do think Silicon Valley has shifted a lot over over the years so I was in an undergraduate at Stanford in the late 1980s Stanford was sort of a very liberal politically correct place but the Silicon Valley surrounding not so much it was vaguely libertarian you know it was it was a moderate Republican congressional district and and then so by the late 90s I would say to shifted to being sort of a moderate moderate Democrat which is around the time I started PayPal and he fast forward another twenty years it's sort of it's it's it's sort of a pretty hard left yeah so what is it what do you think has there because it seems to me that if I was taking the people that I wanted to be the most creative the most outside the box the most to look at the system and go how do we fix the system from the outside you'd want a lot of libertarian thinkers that's that's the way I would at least look at it so you'd think that everyone in Silicon Valley would be pretty libertarian they want to do things on their own and yet somehow in those twenty years it became the Opera well it's it's all I can only ask the question why is it why is it so so long I think these things are you know there's somewhat over to term so I would say part of it is on is that it's probably the most educated part of the country in terms of how much time people spent in college mm-hmm and I think one of the downsides of too much education is that you get the most brainwashed and so it's it's it's the most educated can also mean that it is it is the it is the most brainwashed you know this is perhaps not so true of the founders but certainly of of many of the the rank-and-file people who are on you know if you're sort of like a really good engineer or you know really good at some specific thing your education typically does not involve you thinking that much about about politics and so it's not necessarily from deep ideological conviction it's often more as a fashion statement than as a question of of power and so and so one of the things it's always a little bit hard to score is that even if you took a survey in Silicon Valley it's it's it comes out as you know quite far to the left you know weirdly uniform weird sort of groupthink it's super hard to know whether people really believe this or whether they're whether they're just going along or so I I think it's pretty liberal but but of course not as liberal as it looks and that's that's in a way worse because it means people are too scared to articulate things right it was a there was a dinner I had at my house a week before the 2016 election with a group of sorts of center-right Silicon Valley people one of them was uh is a very prominent angel investor in Silicon Valley and he said you know I'm voting for Trump in a week but because I live in Silicon Valley I'm lying about it and so he's saying this to you but told full people there yeah and and avenges who's honest about why it's unusual is a little bit unusual yeah and and the way I lie is I tell people I'm voting for Gary Johnson the libertarian so it's like you couldn't you couldn't quite get away telling people that he was voting for Hillary Clinton because about your facial muscles wouldn't work and tell that your line is so small I Gary Johnson that was sort of what you what you could do yeah and and I think you know if you sort of looked at what happened in the weeks before the election the Gary Johnson support sort of collapsed it all went to trump mm-hmm and the the question you have to ask is whether did those people just change their minds the last minute or were they lying all along or were they lying to themselves and and so I think the the sort of political correctness you know it's always bad for thought but it always makes things appear more uniform than they are even in Silicon Valley yeah well I think you know this I said I was gonna vote for Gary Johnson and I did vote for Gary Johnson and as I always say I should be judged accordingly but here we are so this is actually a perfect segue then to the diversity myth because 20 years ago you're you're at Stanford and you saw a lot of the problems that we are talking about today over and over again I I told you a couple months ago I was listening on c-span to a talk you gave about the diversity myth and again it's from about I think at that point it was like 18 years ago or something and I was listening to it and David walked into the room and he said who is that talking because it was all true and it was he thought it was somebody I would he thought I was listening to the news of today like somebody laying out what's going on today but you saw this this issue with multiculturalism with faux diversity the focus on equality of outcome not opportunity you saw all this way before seemingly anyone did have how did that come to be well it was there was certainly quite a wave of this stuff in the late 80s early 90s on you know a number of college campuses and for a variety of reasons on you know a lot of it crystallized at Stanford there was a there was this there was this super intense debate about a Western culture which was both a freshman one year long freshman sort of general humanities course where you learned about you know Western culture history Western civilization but then it was a course and the and the reserve jesse jackson showed up at campus went one day and sort of led this chant hey hey ho ho western cultures gotta go and people were talking about both the course and of course the whole society and culture that was represented by that and and and then and and so there were a lot of these different debate that God got sort of thrown up so is it you know was concerned about discriminant racial discrimination gender discrimination you know other kinds of people who are victimized and then and then in many cases it felt like it was this incredible overreach where people were in some sense using their victim status as a stick with which to beat other people up or something like that or and we're going to now victimize the victimizers and it's gonna be sort of something like that and and so multiculturalism and political correctness were somehow very linked the the multiculturalism part was we're gonna give special privileges you know to disadvantaged people or gonna somehow correct he's in justices of the past and the politically the intolerant politically correct part was we were gonna go after their oppressors whether they were real or imagined and in many ways it felt like you know incredible overreach you ended up with with these draconian speech codes on campus and and with with sort of the humanities in a sense effectively got gutted in the late 80s at Stanford of course it took you know many years for that to fully play out but and then then of course one of the buzz words then is now was diversity which which and and you know I think I think diversity is a good thing I think especially you know diversity of ideas mmm-hmm is to be valued but you don't have real diversity when you just have a group of people who look different and and think alike and so it has to me it has to be more than just you know than just having the extras from the space Cantina see something like that right and and that's and so that's always that's always so it's always like an internal critique the diversity myth is that it's not about diversity at all it's about it's about conformity was that the first time that you had really staked out what is seemingly an unpopular position although I think actually especially in 2018 is is quite a popular position even if it's thought of as as out there was that the first time you would publicly because nobody wants to be the guy that says stuff and then immediately is gonna be called a racist and a bigot and a homophobe all those things have you ever done anything like that before you know it's it's uh you know I probably you know and it's it's hard to know how far to go back in the pre heated biographical sphere how good I am at this but but probably already in a junior high school high school I would you know I would you know I would take the positions that I believed in and they wouldn't they wouldn't necessarily be the majority positions and so it was you know in it you know in you know junior high school I was totally against drug legalization of any sort and that was a minority that was a minority view war I I supported Reagan in 1980 and you know you know we were sort of a relatively liberal area that was again sort of a minority view so so I think I I would have had I wouldn't say like extreme outlier positions but but I've I've always thought that it was an important thing for yourself yeah so when you wrote the book and then started talking about these issues what kind of pushback did you get because that I think is the core issue that most of my viewers are identifying with these days that they're taking positions that are true that don't mean that they're racists or bigots or homophobes but that they mean they care about more about diversity of ideas than diversity of skin color or those things and and they're scared to say those ideas and yet you were doing it a long time ago well it's it's it's always a it's always a very tricky thing so it's it's it's on some level on some level the way we've just been talking about it there aren't that many people who will will go out of the way to disagree with us so people know you know the people I mean there's some people but mostly we're gonna say you know we'll find out we know don't we we don't want any different views or you know we just suppress views people some people say that but not not really that many right well they mask it in other ways right no one's gonna outright say but then but then in practice yeah you end up with this with this with this incredible conformity even though that's not in theory what people what people want not one of the one of the professor's I studied under at Stanford is Rene Girard is for this cultural philosopher literary theorist is really brilliant guy he sort of always had this mimetic theory that people imitate each other they copy each other they're sort of they're much more prone to fashion and things like this and uh and one of them he was used from France and so one of the one of the metaphors he had for a lot of the sort of more politically correct professors at Stanford was that they all thought they were in the French Resistance but but if they had lived in Vichy France they would have all been collaborators huh and and and so the the the self understanding people have is that they're super courageous independent thinkers and that's why they and and and and and that they would have been in the resistance in France but then in reality if you ask them what the views are that they have it's the same as everybody else around them yeah well that's right and you have to always ask if everyone has the same views it can mean one of two things it can mean that you've reached the absolute truth or it can mean that that you have you have this sort of incredible conformity yeah well it's so interesting because he was talking about the resistance in France and now we have a group of people in America that think that they're part of the resistance and I suspect that if they were in power they would be treating the people who were the the resistance of them much worse than they're being treated right well III thought that the the Girard critique could also apply to them that that you know by identifying yourself as part of you know some mob like resistance movement you're you're suggesting the exact opposite yeah that you know it counts you know political views you know I respect you know I think there are people can have sincere views even if they're in the overwhelming majority but it's it's impressive if you're in the minority so if you're if you're speaking out against President Trump in your small town in Alabama I think that's a person yeah if you're if you're in if you're in San Francisco or Manhattan and and you're part of the resistance I I suspect something very different it's go so that's like what like a different word getting at this is uh is it's you know in a democracy we always think the majority is right so it's 51 and 49 and 51 is probably right if it's a big majority it's even more right so 70/30 even even more right but if it's a hundred to zero 99 to one that's that's what we start to suspect that it will not in a democracy but we're in North Korea or that something's gone wrong with a voting machine or something like this and so when we have these sort of hothouse environments at places like Stanford or Silicon Valley where you have this complete um you know uniformity of thought the thing you have to suspect that's not the wisdom of crowds it's not that everyone's figured out the truth it's a madness of crowds it's some psychosocial insanity yeah and this seems to be directly linked to what's going on on our campuses today right I mean if if twenty years ago you had been thinking these things do you think your prediction would have been oh we'll be able to break these ideas enough so that the the class of teachers and professors may not be so addicted you know it seems to it seems to have come back with a vengeance on college or even even you know radicalized further but but again it it's you know this is sort of this is like it's a it's a it's a subtle you know you don't want to always psychologize people you disagree withFull review >>