Speaking.of.waffles

Peter thiel asked a room of stanford students one question that made most of them quietly stop typing. He asked them what important truth do very few people agree with you on. Then he said the reason most of them could not answer it was the same reason their careers would be average. His name is Peter Thiel, and he has funded more zero to one companies than almost anyone alive. Here is what he said, and why it changes how you should be thinking about your work right now. He said the most valuable thing a person can own in the next decade is not a skill, not a network, and not capital. It is a real contrarian belief that turns out to be true. For most of history, being right about things everyone else was also right about was enough to build a good career. In the world that is arriving, consensus knowledge is free. Anyone can ask a model and get the answer the smart people would have given. The only thing that compounds is being correctly early on something the room thinks is wrong. His framework for testing your contrarian belief is brutally simple. He calls it the three layer test. The first layer is whether your belief is actually contrarian. Most people fail here instantly. They think they have a contrarian view, but when they say it out loud, half the room nods. If your belief is one a smart person at a dinner party would agree with after thinking for ten seconds, it is not contrarian. It is just slightly under the surface consensus. The second layer is whether your belief is specific enough to act on. Saying education is broken is not contrarian, it is a t-shirt. Saying a specific category of credential will collapse in a specific industry within a specific window is something you can build a company around. Most people stop at the t-shirt and wonder why they never compound. The third layer is the one almost everyone skips. Are you actually willing to look stupid for it. Thiel said the number one predictor of which of his students went on to build something important was not intelligence. It was tolerance for being publicly wrong-sounding for years before being right. He said the students who held their contrarian belief privately, waiting for it to be socially safe to say, almost always watched someone else build the thing they had quietly believed in for a decade. The people who are actually winning right now are not the ones with the most knowledge. They are the ones who picked one uncomfortable truth, said it out loud before it was safe, and stayed there long enough for the world to catch up.

Allow me to translate this letter from eBay for those who don’t speak legalese: Ryan, We got your unsolicited offer to buy eBay for $125/share (half cash, half stock) supported by your 5% economic interest in eBay. Our board, backed by the usual crew of bankers and lawyers who get paid either way, “thoroughly reviewed” it. We’re rejecting it. Not because the math doesn’t work. Not because the highly confident letter from TD Securities for up to $20B on top of your $9B+ cash pile is fake. None of that. We’re rejecting it because your entire approach to running a company is an existential threat to how we like to operate here. Here are the reasons we feel this way, and the things we considered before paying consultants to write this: 1) We’d rather keep milking eBay as a “standalone” cash cow than let you turn it into something bigger and better. 2) Sure, you’ve got real financing lined up and you “know people” with deep pockets, but we’re going to call it “uncertain” anyway so we don’t have to engage. 3) Your plan would actually force real long-term growth and profitability changes we’d rather not be held accountable for. 4) The debt we pretended you can’t even obtain, the operational integration and focus on seller satisfaction, and most importantly, putting someone like you in charge of the combined entity all sound like a nightmare for our current leadership structure because all of us would have zero job security. 5) The valuation math only looks bad if you ignore the 46% premium you’re offering our shareholders and the upside from fixing eBay the way you fixed GameStop, which we are choosing to do and hoping nobody notices. 6) And I hope we buried the lede far enough here: Your governance and executive incentives are completely incompatible with ours. You and your board take zero cash, no salary, no bonuses, no golden parachutes. You buy shares with your own money and only get paid if shareholders win. We, on the other hand, like our nice, reliable annual payouts regardless of whether the stock is flat or the company is just coasting. We’re not about to hand over our golden goose to a guy who eats only what he kills. Look, eBay is “strong” and “resilient” in the way every entrenched public company says it is while handing out eight-figure checks and perks to the C-suite. We’ve done the usual incremental stuff: tweaked the marketplace a bit, returned some capital, and we’d like to keep doing that without any cowboy from GameStop coming in and demanding actual skin-in-the-game accountability. Can you just leave us alone? Our team remains focused on protecting the current regime and delivering “value”… mostly to ourselves and our consultants. Thanks, but no thanks, Paul S. Pressler
Chairman of the Board, eBay
(And proud beneficiary of the status quo)