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Kindle Notes & Highlights
by
Peter Thiel
Read between
December 1 - December 11, 2020
Startups don’t need to pay high salaries because they can offer something better: part ownership of the company itself.
However, for equity to create commitment rather than conflict, you must allocate it very carefully.
Giving everyone equal shares is usually a mistake: every individual has different talents and responsibilities as well as different opportunity costs, so equal amounts will seem arbitrary and unfair from the start.
Since it’s impossible to achieve perfect fairness when distributing ownership, founders would do well to keep the details secret. Sending out a company-wide email that lists everyone’s ownership stake would be like dropping a nuclear bomb on your office.
Stories of startup chefs becoming millionaires notwithstanding, people often find equity unattractive. It’s not liquid like cash. It’s tied to one specific company. And if that company doesn’t succeed, it’s worthless. Equity is a powerful tool precisely because of these limitations. Anyone who prefers owning a part of your company to being paid in cash reveals a preference for the long term and a commitment to increasing your company’s value in the future.
What’s wrong with this picture? It includes some of the absurd perks Silicon Valley has made famous, but none of the substance—and without substance perks don’t work.
no company has a culture; every company is a culture.
We didn’t assemble a mafia by sorting through résumés and simply hiring the most talented people.
taking a merely professional view of the workplace, in which free agents check in and out on a transactional basis, is worse than cold: it’s not even rational.
From the start, I wanted PayPal to be tightly knit instead of transactional.
Recruiting is a core competency for any company. It should never be outsourced.
More important than those obvious offerings is your answer to this question: Why should the 20th employee join your company?
Talented people don’t need to work for you; they have plenty of options.
You should ask yourself a more pointed version of the question: Why would someone join your company as its 20th engineer when she could go work at...
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The only good answers are specific to your company, so you won’t find them in this book. But there are two general kinds of good answers: answers about your mission and answers about your team.
Above all, don’t fight the perk war. Anybody who would be more powerfully swayed by free laundry pickup or pet day care would be a bad addition to your team.
From the outside, everyone in your company should be different in the same way.
On the inside, every individual should be sharply distinguished by her work.
The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing.
Most fights inside a company happen when colleagues compete for the same responsibilities.
Eliminating competition makes it easier for everyone to build the kinds of long-term relationships that transcend mere professionalism.
Internal conflict is like an autoimmune disease: the technical cause of death may be pneumonia, but the real cause remains hidden from plain view.
EVEN THOUGH SALES is everywhere, most people underrate its importance.
customers will not come just because you build it. You have to make that happen, and it’s harder than it looks.
advertising matters because it works. It works on nerds, and it works on you.
What nerds miss is that it takes hard work to make sales look easy.
There’s a wide range of sales ability: there are many gradations between novices, experts, and masters. There are even sales grandmasters. If you don’t know any grandmasters, it’s not because you haven’t encountered them, but rather because their art is hidden in plain sight.
Like acting, sales works best when hidden. This explains why almost everyone whose job involves distribution—whether they’re in sales, marketing, or advertising—has a job title that has nothing to do with those things.
People who sell advertising are called “account executives.” People who sell customers work in “business development.” People who sell companies are “investment bankers.” And people who sell themselves are called “politicians.” There’s a reason for these redescriptions: none of us wants to be reminded when we’re being sold.
The most fundamental reason that even businesspeople underestimate the importance of sales is the systematic effort to hide it at every level of every field in a world secretly driven by it.
The engineer’s grail is a product great enough that “it sells itself.” But anyone who would actually say this about a real product must be lying: either he’s delusional (lying to himself) or he’s selling something (and thereby contradicting himself).
