INTRO: You may know Peter Thiel as one of the cofounders
of PayPal.
He masterfully negotiated an acquisition deal with eBay worth $1.5 billion that made the
PayPal team quite wealthy.
Peter’s take from the acquisition was a solid $60 million, but this is not even 1%
of Peter’s current net worth of $9.18 billion.
You see, while Peter is most famous for his involvement with PayPal, PayPal was not even
close to being his most successful investment or business endeavor.
Aside from being a business genius, Peter is no stranger to drama and rivalry.
He’s had this love-hate relationship with Elon for nearly 20 years at this point, and
in the past, he’s waited years to take revenge on those who wronged him.
So, here’s the spicy rise of Peter Thiel.
PETER THIEL: Taking a look back, Peter was born on October
11, 1967, in Frankfurt Germany.
At the time, Germany was split up into east and west Germany, and luckily for Peter, Frankfurt
was located on the west side.
I doubt Peter remembers very much from his early days in Germany though as his parents
would move to Cleveland, Ohio when he was just 1 year old.
In the US, Peter’s father was able to score a solid job as a chemical engineer, but while
this job provided the family with financial stability, it didn’t provide them with much
life stability.
The job required the family to be constantly moving around not just the US but the entire
world.
By the time Peter finished elementary school, he had switched schools 7 times, and one of
these schools was actually located in modern-day Namibia.
Fortunately, the family was finally able to settle down in Foster City, California around
the time Peter hit middle school.
Throughout his school days, Peter had two main passions which were reading sci-fi books
and playing chess.
Peter says that he’s read the Lord Of The Rings over 10 times, and 6 of his companies
are actually named after references to the book and the author.
As for chess, Peter started playing the game when he was 6 and he would become one of the
strongest junior competitors.
In fact, he was so good that he was awarded the title of Life Master.
Chess wasn’t Peter’s only strong suit though.
He was particularly talented in mathematics and he would graduate as valedictorian.
After high school, Peter would attend Stanford where he majored in philosophy, and though
he enjoyed the content, he wasn’t a fan of the liberal biases embedded within the
education.
This was one of Peter’s first entanglements with controversy as he would turn around and
cofound The Stanford Review which was a conservative-libertarian newspaper.
Peter served as the editor-in-chief up until graduation, but that wasn’t the end of his
support.
He still donates to the newspaper to this day and he commonly hires students from the
newspaper.
Anyway, after his undergraduate days, Peter would turn around and attend Stanford once
again to get his Juris Doctor degree.
And yes, this means that Peter was formally trained to be a lawyer.
After graduation in 1992, he started clerking for a judge in the US appeals court, and he
would eventually work up to being a securities lawyer in New York.
But Peter would end up quitting this job and basically law as a whole just 7 months later
stating that he found little transcendental value in this work.
Peter bounced around a little after leaving law, shortly working as a derivatives trader
and as a speechwriter.
But in 1996, he decided to return back to California and look for a more meaningful
job.
He never found this perfect job, but he would find a perfect career.
PAYPAL: Peter didn’t just jump straight into PayPal;
in fact, he wasn’t even looking to start his own business.
He was, however, determined to get involved in an internet company as he saw the dot-com
boom unfold, so he became a venture capitalist.
In 1996, Peter started Thiel Capital Management and funded it using money from friends, family,
and his personal savings.
Peter’s first investment was $100,000 into a man named Luke Nosek.
Luke had the idea of creating a web-based calendar, but this idea didn’t quite pan
out.
Peter’s second investment was also in Luke Nosek.
But this time, Max Levchin was also involved and the idea was to create a digital cryptography
company called Confinity.
The company originally sold security software for handheld devices, but they found little
success in this area.
So, Peter decided to shift the company into fintech with the launch of something called
PayPal.
Today, PayPal has basically become ubiquitous with online payments, but this wasn’t Peter’s
intention.
You see, Peter’s goal with PayPal was much more philosophical and intellectual.
Peter wanted to create a sort of decentralized rebellion against inflation similar to Bitcoin.
Peter hated that the government was inflating away currency and he thought that the solution
was creating a digital exchange that allowed people to easily switch between currencies.
This way, PayPal users could basically boycott certain currencies and force governments to
respond.
In 1999, Peter said quote, “It will be nearly impossible for corrupt governments to steal
wealth from their people through their old means because if they try the people will
switch to dollars or Pounds or Yen, in effect dumping the worthless local currency for something
more secure.”
It looks to me like Peter was begging to be on the government’s watchlist, but you know,
this was just Peter being Peter.
Unfortunately, though, the general public didn’t respond as Peter expected and PayPal
ended up as just a popular mode of payment.
Despite their popularity, running the business wasn’t easy given how much cash they were
bleeding.
So, in the early 2000s, PayPal would merge with a competitor called X.com and this is
where Elon would get involved.
The merger helped secure PayPal’s market share, but their financial situation didn’t
get any better.
So, the company was forced to go public and they would soon be sold to eBay.
While this made Peter quite wealthy, this was just the beginning.
SERIAL ENTREPRENEUR: One of the first things Peter did after selling
PayPal was starting Clarium Capital.
Clarium was a macro hedge fund focussed on trading currencies, interest rates, commodities,
and equities.
And Peter based the firm’s investment thesis around the peak-oil theory which states that
the world is running out of oil and there are no easy alternatives.
This strategy proved to be extremely successful for Peter as Clarium posted 40% year after
40% year.
He grew the fund from just $10 million from himself in 2002 to $7 billion in 2008.
But, by 2011, most investors left the fund, not because Clarium got crushed by the financial
crisis but because Peter missed out on buying the dip.
This was quite unfortunate, but by this point, Peter’s initial $10 million had grown to
$230 million, so I think it worked out just fine.
Aside from starting Clarium, Peter also founded Palantir in May of 2003.
Palantir is a data analytics company that helps the government track down criminals,
monitor supply chains, and more recently predict covid outbreaks.
Palantir has always been a popular investment within the tech world, but since their IPO
in 2020, Palantir has become a popular choice amongst retail investors as well.
The company saw valuations as high as $80 billion following their IPO, but they have
since settled down at a more modest $38 billion.
Around the same time as starting Palantir, Peter became an angel investor in Facebook.
In 2004, he invested $500,000 in exchange for 10.2% of the company.
This gave him a spot on the board and Peter actually helped Facebook with future funding
rounds.
But, ever since Facebook went public, Peter has been slowly selling off his stake.
He still has a few thousand shares of Facebook left but compared to his 16.8 million shares
when Facebook went public, this is nothing.
Though Peter gave up most of his shares, he did cash out over a billion dollars securing
a casual 2000x return.
And did I mention, Facebook was just one of his star performers.
In 2005, Peter created something called the Founders Fund which was focused on capitalizing
on early-stage companies.
And their list of insane investments literally goes on forever.
We have Airbnb, Slide.com, LinkedIn, Friendster, RapLeaf, Geni.com, Yammer, Yelp Inc., Spotify,
Powerset, Practice Fusion, MetaMed, Vator, SpaceX, IronPort, Votizen, Big Think, CapLinked,
Quora, Nanotronics Imaging, Rypple, TransferWise, Stripe, Block.one, and AltSchool.
Peter also purchased $15 to $20 million worth of bitcoin in mid-2017.
And he gave Vitalik Buterin $100,000 to drop out of college and found Ethereum.
Like I said, Peter is literally involved in everything, and we still have more to cover.
In 2012, Peter founded Valar Ventures which is focused on investing in startups outside
of Silicon Valley.
That same year, he also founded Mithril Capital which is focused on investing in mid-stage
companies that are ready to scale.
On top of all of this, Peter became a part-time partner at Y Combinator in March of 2015.
However, this only lasted two years as Peter quickly formed some beef with the other leaders,
and that brings us into Peter’s beef with everyone.
BEEF: We’ve already covered Peter’s beef with
Stanford’s super liberal views and his hatred for inflation, but this was just scratching
the surface.
Peter has a tendency of hating institutions in general and this makes sense given that
he’s a libertarian.
One of Peter’s most controversial views is his loathing of higher education.
Of course, Peter isn’t against education or learning by any means, but he strongly
believes that modern universities are overpriced relics that are holding back real innovation.
He thinks that people should skip college, that higher education has brainwashed Silicon
Valley, that higher education is the biggest bubble in the world, and that brilliant kids
don’t need college.
One of his efforts in fighting college has been the Thiel Fellowship which offers students
$100,000 to drop out of school and start a business instead.
Ethereum was actually a product of one of these fellowships.
Peter’s beef isn’t just limited to institutions either.
He has plenty of beef with people as well with one of his notable beefs being with Elon
Musk.
As we touched on before, PayPal merged with X.com in the early 2000s, and Elon would eventually
become the CEO of the joint company.
But, Elon had very different views about the future of the company and branding.
Peter and the rest of the board didn’t really agree with this vision, so they would fire
Elon while he was on vacation.
Elon obviously felt that this was a backstab move from Peter, and this is where the beef
really started.
Peter didn’t mean for this to be personal and both of them have tried to make amends.
For example, Peter would invest $20 million in SpaceX in 2008 and help save the company
from bankruptcy.
Also, I’m sure they both have immense respect for each other’s skills and capabilities.
But with that being said, they still trash talk each other all the time.
Peter has called Elon a fraud and a braggart and he thinks that Elon isn’t a good role
model.
Meanwhile, Elon thinks that Peter is a sociopath.
Clearly, Peter and Elon have a love-hate relationship, but not all of Peter’s relationships are
so benign.
Some of his relationships are just hate-hate relationships, and the best example of this
is the Gawker lawsuit.
In 2016, Terry Bollea filed a lawsuit against Gawker Media for invasion of privacy and emotional
distress.
Peter had nothing to do with the lawsuit itself, but he decided to fund Terry with $10 million
to fight against Gawker Media, and this helped Terry win a $140 million lawsuit against Gawker
which forced the media company to shut down.
Now, Terry was in the right so Peter was funding justice, but this was not the main reason
that Peter decided to help Terry.
You see, Peter had his own beef with Gawker from nearly a decade ago.
In 2007, Gawker media posted an article titled, Peter Thiel is totally gay, people.
As you would guess, Peter was not a big fan of this article and he made it his personal
mission to take down the company.
Peter says that taking down Gawker was less about revenge and more about specific deterrence,
but I’ll let you be the judge of that.
Anyway, while some of Peter’s beef is personal and a little childish, most of it is intellectually
fueled.
After all, Peter basically envisioned bitcoin 22 years ago, so I think it’s just a matter
of time until his other assertions also become a reality.
Now, this doesn’t mean you should just go ahead and drop out of college or anything.
But I think it’s definitely a good idea to keep Peter’s arguments in the back of
your head as you navigate through life.
But that’s just what I think.
Do you think Peter is a genius visionary or just a rogue troublemaker?
Comment that down below.
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