Lawrence J. Aragon wrote a new post, Submit your entries for Buyouts’ Deal of the Year awards, on the site PE HUB 2 months, 1 week ago
Buyouts is accepting applications for its 16th annual Deal of the Year awards, honoring exceptional buyouts that were fully or mostly realized in 2015. The deadline for submissions is February 26, 2016, but the […]
Lawrence J. Aragon wrote a new post, CalPERS to disclose carried interest payments this fall, on the site PE HUB 7 months, 1 week ago
CalPERS, the nation’s largest pension fund, announced today that it will report the amount of carried interest it has paid to general partners for fiscal 2015 in the fall. The announcement follows a statement in […]
Lawrence J. Aragon wrote a new post, Former WL Ross exec sues firm to open up books — WSJ, on the site PE HUB 11 months ago
A former executive with WL Ross & Co is suing the private equity firm to force it to open its books and records to him, the Wall Street Journal reported.
David Storper, once a member of WL Ross’s Investment […]
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In this week’s top 10 private equity posts, Morgan Stanley Capital Partners and Hamilton Lane are looking for a couple of good VPs, Blackstone wants to peddle Apria, and LPs have GPs feeling like they’re in an <a […]
Spring is four months away, but love is in the air. At least in the venture business. With the success of dating app Tinder, VCs are hot to find another matchmaking hit. They have poured in excess of $70 million […]
We’ve been brainwashed into thinking that the losers are the people who don’t compete intensely enough.
Uber is overvalued because investors like driving in Town Cars.
Engineers tend to be pretty bad at business. Scientists are catastrophic.
Peter Thiel may very well be the most quotable venture capitalist on the planet. He has something interesting and/or funny to say about even the most pedestrian subjects.
At our recent PartnerConnect West conference, the co-founder of PayPal and Founders Fund riffed on Apple, Google, Uber, tech founders, competition, phony technology companies and lots more.
If you don’t have time to watch the video from start to finish, here’s a handy guide to skip to particular topics. The following quotes have been edited for clarity.
(If you think we’ve missed any gems, please let us know in the comments section and we’ll amend the post.)
(If you have trouble streaming this video, watch it on YouTube.)
Why competition is for losers (7:39)
“That is psychologically the mindset we should always try to have, because we’ve been brainwashed into thinking that the losers are the people who don’t compete intensely enough. I would submit to you that the losers are the people who do the exact same things as everybody else and who believe it is about competing more intensely for scraps. It’s like how Henry Kissinger described his fellow professors at Harvard: ‘The battles were so ferocious because the stakes were so small.’”
On “zero to one” companies commonly believed to be “one to n” n companies, such as Google and Facebook (8:45)
“Certainly there had been search companies. I would say Google was the first one to have a computerized algorithm with its PageRank algorithm. That was a fundamental shift which enabled it to do it in a way that was vastly better than anybody else.”
“I think Facebook was the first one to get real identity. You had all these different social networking companies for a long time, but they hadn’t really cracked the real identity thing.”
On Steve Jobs and the importance of founders (10:30)
“The companies that are able to still innovate in a dramatic way are the companies that are founder-led. It was very critical in the case of Apple that [Steve] Jobs came back in 1997 and radically shifted the company from a home-computer company to a consumer-electronics company. If you [have] the kinds of politicians that masquerade as CEOs at most public companies or the sort of supine people that these boards normally feel comfortable appointing, then you will never get that kind of innovation. That’s why truly innovative companies are ones that are still founder led.”
On fake tech companies (11:44)
“There are a lot of so-called technology companies which are fundamentally bets against technology. If you went down the Nasdaq 100, my claim is that most of the investments are bets against technology. Microsoft: You’re betting [the top operating system] will never be Linux, that there will never be a different operating system. IBM: We’re going to have the same kludgy software from the ‘70s and ‘80s forever. Oracle: a bet against cloud computing. … Often these bets actually work pretty well. You’re effectively short gamma and you’re short volatility. You’re assuming there will be no disruption, nothing will change, there will be no innovation. And because we’re in a world where innovation is actually more limited than people think these have often been very good bets. But you shouldn’t fool yourself and pretend that these are technology companies.”
On Apple and whether it is still a technology company (12:58)
“I don’t want to take any potshots at Tim Cook because he has almost impossibly large shoes to fill, but, I think Apple at this point is fundamentally a bet against innovation in smart phones. It will work as an investment if the smart phone is close to [its] final form. It’s actually a brand play. In some ways that was the wrong view when the Apple board hired Sculley in 1985, where they thought home computers were finished and it was just like marketing Coke or Pepsi. [But] it’s possible that that is actually the case with smart phones, that there isn’t that much more you can do with them, [so] it is actually like marketing Coke or Pepsi and it will just generate enormous profit streams for many years to come. Coke and Pepsi are not tech companies but they have been good investments for a long time.”
On whether Google is still a technology company (14:32)
“Google is still trying a lot of things. But it is striking that even a company like Google, where the branding is all around the technology, and yet the odd thing is that they are building up more and more cash. So there is some sense that even a founder-led company like Google that wants to do a lot of radical new things finds it hard to find ways to deploy all their capital to do this.”
On tech companies paying dividends (16:01)
“As soon as you start issuing dividends it is a complete admission of failure [as a tech company].”
On VCs and Uber (26:06)
“I think VCs often have a blind spot. They overvalue things they use and undervalue things they don’t use. I think Uber is overvalued because investors like driving in Town Cars.”
Why he’s not bullish about biotech (29:00)
“The thing that I’ve come to think as very important for companies where there is a big science component is actually the business side. Engineers tend to be pretty bad at business. Scientists are catastrophic. And they have all sorts of fantastical delusions about how the world works. They think if they come up with something great, the world will rush to their door and buy it.”
Photo: Peter Thiel, tech entrepreneur and venture capitalist, speaks at PartnerConnect West 2014 on Oct. 7, 2014. Photo by Oscar Urizar for Buyouts Insider
Lawrence J. Aragon wrote a new post, Top 10 PE posts, Halloween edition: Pennsylvania gives Centerbridge the axe, on the site PE HUB 1 year, 3 months ago
Here are the 10 most popular private equity-related posts on peHUB for Oct. 24 – 30. (Go here for our top 10 VC posts.)
Lawrence J. Aragon wrote a new post, Top 10 VC posts: Phreesia, Enjoy, TaskEasy and ScoreBig slam-dunk new rounds, on the site PE HUB 1 year, 3 months ago
Here are the 10 most popular venture capital-related posts on peHUB for Oct. 23 – 29. Check in tomorrow for our 10 most popular private equity posts.
Lawrence J. Aragon wrote a new post, Inspiring video: Steve Young wants you to challenge yourself to see how good you can be, on the site PE HUB 1 year, 3 months ago
Like only a Hall of Fame quarterback could do, Steve Young pumped up the audience at our PartnerConnect West conference earlier this month. Young, who co-founded private equity firm HGGC after retiring from football, had the crowd hanging on his every word as he shared his journey from the grid iron to the boardroom. How does a guy who’s 6 feet (by comparison, Peyton Manning is 6-foot-5) become the highest-rated quarterback in NFL history? Click play, sit back and listen to one of the greats.
(Having trouble watching this video? Check it out on YouTube)
Photo: Steve Young speaks at PartnerConnect West Oct 7, 2014, in Half Moon Bay, Calif. Photographed by Oscar Urizar for Buyouts Insider, publisher of peHUB and producer of PartnerConnect events.
Lawrence J. Aragon wrote a new post, Top 10 VC posts: How much to make itty-bitty elephants fly?, on the site PE HUB 1 year, 3 months ago
Here are the 10 most popular venture capital-related posts on peHUB for Oct 16 – 22. Check in tomorrow for our 10 most popular private equity posts.
Lawrence J. Aragon wrote a new post, Breyer says battle for tech talent has grown fiercer because of Chinese Internet giants , on the site PE HUB 1 year, 3 months ago
Venture capitalist Jim Breyer, best known for leading Accel Partners‘ early investment in Facebook, said it has become much more difficult to recruit talent in Silicon Valley because of competition from large […]
Lawrence J. Aragon wrote a new post, Top 10 PE posts: Secondaries poised to top $35 bln, Culpeper ceases new deals, Vista closes big fund and deal in same week, on the site PE HUB 1 year, 3 months ago
Don’t be fooled by the third-quarter numbers.
It might look like venture capitalists have heeded the warnings about over-investing, but that’s just not the case. Yes, deal making slowed from the second to third quarter, as reported by both the National Venture Capital Association and Dow Jones. But you need to look at the entire year to understand what’s really happening.
For the first three quarters of this year more than $33 billion has been put to work in U.S.-based companies. That is $3 billion more than the amount invested in all of 2013, according to the MoneyTree Report from the NVCA and PricewaterhouseCoopers, based on data by Thomson Reuters.
To find a year where more money was invested you have to go back to – you guessed it – 2001. (Cue the spooky organ player.) In the year before the bubble burst, VCs invested $40.94 billion. With a quarter to go, we are now on track to match or even surpass that number. Given what happened in 2002, “beating” the 2001 figure may not be something to boast about.
Some high-profile VCs have recently warned that the market is too frothy. “I think that Silicon Valley as a whole, or that the venture-capital community or startup community, is taking on an excessive amount of risk right now — unprecedented since ’99,” Bill Gurley of Benchmark Capital told the Wall Street Journal last month.
Here are the full reports from MoneyTree and Dow Jones:
Photo: Scary ghost courtesy of ShutterStock
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