SAN FRANCISCO--Peter Thiel believes technology will make the world a much better place. He's simply frustrated at how long it's taking.
The billionaire entrepreneur is best known for co-founding PayPal, and, more recently, for his very early investment in Facebook. He founded Clarium Capital Management, a hedge fund, created the philanthropic Thiel Foundation, and co-produced the irreverent 2005 comedy Thank You for Smoking.
In May, the Thiel Foundation announced the first 24 recipients of a fellowship that awards $100,000 each to youth under 20 years old--essentially encouraging them to drop out of college to become entrepreneurs. The Founders Fund, where Thiel is a managing partner, has invested in aerospace, robotics, and biotechnology, in addition to consumer Internet companies including Slide and Spotify.
Thiel's unorthodox take on philanthropy, and keen interest in the pace of technological change, led him to organize a "Breakthrough Philanthropy" event last year at San Francisco's Palace of Fine Arts. Just as entrepreneurs pitch venture capitalists, tech-oriented nonprofits were given a few minutes each to tell the audience why ideas like artificial intelligence, nanotechnology, life extension, and seasteading deserved their financial support.
CNET interviewed Thiel early last month in his offices in San Francisco's Presidio to talk about the pace of technological change, a possible Facebook IPO (he's on the company's board), and the state of tech startups today. Below is the transcribed interview, lightly edited for clarity.
Q: The stimulus legislation spent something like $120 billion on clean-energy tech. Google's previous director of climate change, an assistant secretary of energy under Clinton, called for a new government agency to fund clean-tech companies. Good ideas or corporate welfare?
Thiel: I think it's a bad idea. There's a looking-backward and looking-forward question. Looking backward over the last decade, the question is how badly clean tech has worked out. I think the Solyndra failure is--you normally can't read too much into one company failing. It certainly is dramatic. The amount was large. It was fast. The expectations changed pretty quickly.
The worry is that we'd like to see some real successes too. There's a question of whether there's something wrong with government picking winners, or picking winners and losers, but there's definitely something wrong with the government only picking losers.
The question about clean tech is not whether the government is picking winners, but whether the government is only picking losers. That's the worry people have. There would be no issue with Solyndra if we had just a few things that were just working that you could point to. Even in the tens of billions of dollars, if you could get a few winners that would be worth it. It is not clear what they are. It is certainly not clear where they are on the Silicon Valley venture capital side. I think the people who invested in clean technology have a lot of incentives to talk about the winners. There has been a deafening silence.
It's striking how little one hears about clean tech on the venture capital side over the last year or so. I wouldn't say they are always the smart money. They tend to be the less dumb money. And so that seems to me to be a useful indicator. There's a question about what's gone wrong with clean tech and a question about what goes wrong.
It was incredibly conflated with investment and ideology. It's sort of like social entrepreneurship, where people try to do well by doing good and end up doing neither. There's a strong argument that we needed to develop alternatives to oil. There may be a climate change argument. But that becomes a very dangerous point when you start thinking that you don't need to pay attention to the technology because the government will bail you out.
If I recall your investment portfolio correctly, you stayed away from this.
Thiel: We have not made any investments in it. One of the other things that's been very strange about the clean tech question--there are all these things about it where I think the thinking hasn't been disciplined, you've heard all these ideological conflations and commitments that confused the thinking.
One of the basic questions about clean tech is: Is it driven by a shortage of conventional energy or is it driven by climate change worries? They are somewhat linked. But they may be very different in nature. You could have a scenario where you have plenty of oil and plenty of coal, and you could just produce the coal but it's too dirty. Or you could have a scenario where you're running out of oil and you need to develop alternatives.
One scenario is more economic. One is more environmental in nature. In practice these two things have gotten hopelessly confused and conflated. As the technology and politics have gotten confused, the economics without a concern with the environmental stuff has gotten confused.
The Warren Buffet rhetorical point is his $34 billion investment in late 2009 in a railway, the single biggest investment by Berkshire Hathaway outside of finance. It is an all-out bet against clean tech. It was described as a bet on America, but 40 percent of what gets transported on railroads is coal. You have to look at Buffett's railroad investments as an all-out bet that clean tech is going to fail.
Link to entire lengthy interview: http://news.cnet.com/8301-31921_3-20114584-281/talking-tech-with-peter-thiel-investor-and-philanthropist-q-a/
The billionaire entrepreneur is best known for co-founding PayPal, and, more recently, for his very early investment in Facebook. He founded Clarium Capital Management, a hedge fund, created the philanthropic Thiel Foundation, and co-produced the irreverent 2005 comedy Thank You for Smoking.
In May, the Thiel Foundation announced the first 24 recipients of a fellowship that awards $100,000 each to youth under 20 years old--essentially encouraging them to drop out of college to become entrepreneurs. The Founders Fund, where Thiel is a managing partner, has invested in aerospace, robotics, and biotechnology, in addition to consumer Internet companies including Slide and Spotify.
Thiel's unorthodox take on philanthropy, and keen interest in the pace of technological change, led him to organize a "Breakthrough Philanthropy" event last year at San Francisco's Palace of Fine Arts. Just as entrepreneurs pitch venture capitalists, tech-oriented nonprofits were given a few minutes each to tell the audience why ideas like artificial intelligence, nanotechnology, life extension, and seasteading deserved their financial support.
CNET interviewed Thiel early last month in his offices in San Francisco's Presidio to talk about the pace of technological change, a possible Facebook IPO (he's on the company's board), and the state of tech startups today. Below is the transcribed interview, lightly edited for clarity.
Q: The stimulus legislation spent something like $120 billion on clean-energy tech. Google's previous director of climate change, an assistant secretary of energy under Clinton, called for a new government agency to fund clean-tech companies. Good ideas or corporate welfare?
Thiel: I think it's a bad idea. There's a looking-backward and looking-forward question. Looking backward over the last decade, the question is how badly clean tech has worked out. I think the Solyndra failure is--you normally can't read too much into one company failing. It certainly is dramatic. The amount was large. It was fast. The expectations changed pretty quickly.
The worry is that we'd like to see some real successes too. There's a question of whether there's something wrong with government picking winners, or picking winners and losers, but there's definitely something wrong with the government only picking losers.
The question about clean tech is not whether the government is picking winners, but whether the government is only picking losers. That's the worry people have. There would be no issue with Solyndra if we had just a few things that were just working that you could point to. Even in the tens of billions of dollars, if you could get a few winners that would be worth it. It is not clear what they are. It is certainly not clear where they are on the Silicon Valley venture capital side. I think the people who invested in clean technology have a lot of incentives to talk about the winners. There has been a deafening silence.
It's striking how little one hears about clean tech on the venture capital side over the last year or so. I wouldn't say they are always the smart money. They tend to be the less dumb money. And so that seems to me to be a useful indicator. There's a question about what's gone wrong with clean tech and a question about what goes wrong.
It was incredibly conflated with investment and ideology. It's sort of like social entrepreneurship, where people try to do well by doing good and end up doing neither. There's a strong argument that we needed to develop alternatives to oil. There may be a climate change argument. But that becomes a very dangerous point when you start thinking that you don't need to pay attention to the technology because the government will bail you out.
If I recall your investment portfolio correctly, you stayed away from this.
Thiel: We have not made any investments in it. One of the other things that's been very strange about the clean tech question--there are all these things about it where I think the thinking hasn't been disciplined, you've heard all these ideological conflations and commitments that confused the thinking.
One of the basic questions about clean tech is: Is it driven by a shortage of conventional energy or is it driven by climate change worries? They are somewhat linked. But they may be very different in nature. You could have a scenario where you have plenty of oil and plenty of coal, and you could just produce the coal but it's too dirty. Or you could have a scenario where you're running out of oil and you need to develop alternatives.
One scenario is more economic. One is more environmental in nature. In practice these two things have gotten hopelessly confused and conflated. As the technology and politics have gotten confused, the economics without a concern with the environmental stuff has gotten confused.
The Warren Buffet rhetorical point is his $34 billion investment in late 2009 in a railway, the single biggest investment by Berkshire Hathaway outside of finance. It is an all-out bet against clean tech. It was described as a bet on America, but 40 percent of what gets transported on railroads is coal. You have to look at Buffett's railroad investments as an all-out bet that clean tech is going to fail.
Link to entire lengthy interview: http://news.cnet.com/8301-31921_3-20114584-281/talking-tech-with-peter-thiel-investor-and-philanthropist-q-a/
