#31 Conspiracy Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue and Zero to One Notes on Startups, or How to Build the Future

Abstract
Summary Notes

Abstract

In this episode, the host discusses the transformative power of advertising, its pervasive nature, and his personal avoidance of ads, emphasizing their effectiveness even on the most resistant individuals. He announces a new ad-free podcast model, with regular releases and premium episodes on Patreon, aligning with his goal to provide useful ideas for founders and entrepreneurs without time constraints. The episode delves into the book "Conspiracy" by Ryan Holiday, which recounts Peter Thiel's secret battle against Gawker Media, drawing parallels between the principles of a successful conspiracy and those of business ventures. The host reflects on the importance of culture, mission, and the bonds that unite a team, as illustrated in the book and in Peter Thiel's other work, "Zero to One," which advocates for creating monopolies through unique, value-creating businesses. The episode also explores the dangers of competition, the significance of sales, and the necessity of having a long-term vision for a company's endurance and impact.

Summary Notes

Avoidance of Advertising Influence

  • Speaker A expresses a strong aversion to advertisements, employing various methods to avoid them.
  • Acknowledges the effectiveness of advertising, even on those who believe they are immune.
  • Quotes from "Zero to One" by Peter Thiel to illustrate the persuasive power of ads.
  • Decides to make podcasts ad-free to align with the goal of delivering useful ideas without time constraints.

"To quote one of the books that I talk about on the podcast today, zero to one ad advertising matters because it works. It works on nerds, and it works on you."

The quote from "Zero to One" emphasizes the universal impact of advertising, suggesting that even the most discerning individuals are not exempt from its influence.

Culture and Strategy in Business and Conspiracies

  • Speaker A references Peter Drucker's line about culture's dominance over strategy.
  • Discusses the importance of a strong, positive culture in both business and conspiratorial contexts.
  • Suggests that robust cultural ties can help entities withstand challenges.

"The line attributed to the management guru Peter Drucker is that culture eats strategy."

This quote highlights the idea that the underlying culture of an organization is more influential than its strategic plans.

Ryan Holiday's "Conspiracy" and Peter Thiel's "Zero to One"

  • Speaker A plans to discuss two books: "Conspiracy" by Ryan Holiday and "Zero to One" by Peter Thiel.
  • Notes the resonance between the principles in both books.
  • Encourages listeners to think of "conspiracy" in terms of business or personal projects.

"So I decided that I'm going to do the podcast on Peter Thiel using both the books."

Speaker A's decision to use both books for the podcast underscores the interconnectedness of the ideas presented in them.

The Premise of Ryan Holiday's "Conspiracy"

  • Speaker A introduces "Conspiracy" as the story of Peter Thiel's secret battle against Gawker Media.
  • Mentions Holiday's ability to weave philosophy and history into the narrative.
  • Describes the book as an exploration of strategic power and the ability to shape events.

"Rather, this is the story of a conspiracy. The story of a billionaire who set out to make an example of a millionaire to destroy the man's life work in response to a cruel transgression made as thoughtlessly as it was quickly forgotten."

The quote sets the stage for the book "Conspiracy," presenting the conflict between Peter Thiel and Gawker Media as a calculated and strategic endeavor.

The Essence of Conspiracy and Business

  • Speaker A draws parallels between the nature of conspiracies and the process of starting and running a business.
  • Emphasizes the importance of strategic planning, coordination, and secrecy in both endeavors.
  • Suggests that conspiracies and businesses both require patience and boldness.

"Conspiracy entails determined, coordinated action, done in secret, always in secret, that aims to disrupt the status quo or accomplish some aim."

This quote describes the fundamental characteristics of a conspiracy, which Speaker A argues are applicable to business ventures as well.

Peter Thiel's Contrarian Question

  • Speaker A discusses Thiel's famous contrarian question and Ryan Holiday's personal answer to it.
  • Explores the notion that society could benefit from more strategic plotting and boldness.
  • Contemplates the current state of entrepreneurship and the need for more individuals to pursue their own ventures.

"What important truth do very few people agree with you on?"

The quote represents Peter Thiel's contrarian question, which challenges individuals to consider unconventional truths they believe in.

The Gawker Lawsuit and the Right to Privacy

  • Speaker A recounts the background of the Gawker lawsuit involving Hulk Hogan and Peter Thiel.
  • Discusses the implications of the case on privacy rights and the Fourth Amendment.
  • Highlights the significance of the lawsuit's outcome and its relation to Peter Thiel's values.

"It is perhaps the largest verdict against a publisher in history. And the death blow in a feud that began a decade earlier, bringing with it the culmination of a conspiracy that had run nearly as long."

This quote summarizes the impact of the Gawker lawsuit, marking a significant victory for privacy and the culmination of Thiel's long-term strategy.

Peter Thiel's Background and Motivations

  • Speaker A provides a brief biography of Peter Thiel, detailing his career trajectory from law to entrepreneurship.
  • Describes Thiel's experiences with Gawker and his personal views on privacy and intellectual freedom.
  • Explains how Thiel's encounter with Gawker's outing of his sexuality became the catalyst for his actions against the company.

"It was like a full on attack out of the blue. There was nothing I'd ever done to these people in any way whatsoever."

The quote reflects Peter Thiel's perspective on Gawker's unprovoked attack on his privacy, which motivated his subsequent actions against them.

The Power of Books and Ideas

  • Speaker A emphasizes the influence of books and ideas on individuals, using Thiel's experience with Machiavelli's writings as an example.
  • Suggests that exposure to certain ideas can lead to significant changes in one's life and actions.
  • Highlights the importance of carefully selecting the ideas and information one consumes.

"Something in these pages planted itself deep into Teal's mind when he first read it long ago, and something in Teal allowed him to see past Machiavelli's deceptive warnings against conspiracies and hear the wily strategist's true message."

This quote illustrates the profound impact that Machiavelli's writings had on Peter Thiel, shaping his approach to strategic thinking and action.

Weighing the Stakes

  • The process of decision-making involves considering the consequences of action vs. inaction.
  • Evaluating risks is essential, with historical uncertainty about whether it's riskier to act or to ignore a problem.
  • People in Peter's life doubted his ability to change a situation, but he was influenced by historical battles and the idea that small issues can escalate if not addressed early.

"History is uncertain of this question, as were the people in Peter's life, the ones trying to tell him that there wasn't much that he could do."

The quote underlines the uncertainty and skepticism Peter faced from those around him regarding his ability to effect change.

Peter Thiel's Contrarian Mindset

  • Peter Thiel's personality involves a cautious and deliberate approach to forming and expressing opinions.
  • He often starts by explaining the common view before sharing his own, typically unorthodox, perspective.
  • Thiel's methodical thought process reflects his nature of constantly evaluating and articulating his beliefs.

"His anger is at odds with the cautious mind that is in his nature."

This quote highlights the contrast within Thiel's personality between his emotional responses and his inherently cautious and contemplative nature.

The Need for Contrarian Questions

  • From 2007 to 2011, Peter Thiel saw the "Gawker problem" as a cultural and social issue that needed addressing.
  • Thiel's questioning of common beliefs led him to challenge the notion that nothing could be done about Gawker.
  • The contrarian question, "What is true that other people don't think is true?" played a significant role in Thiel's approach.

"The reason I think it's important to ask yourself the contrarian question is because these people wound up being incorrect."

The quote emphasizes the value of questioning widely held beliefs and the potential for contrarian thinking to reveal overlooked solutions.

Influences on Peter Thiel

  • Understanding the influences on individuals can provide insights into their thought processes and decisions.
  • Peter Thiel was significantly influenced by Renee Girard, a French thinker he met at Stanford.
  • Girard's theory of memetic desire suggests that people's desires are often imitative, leading to conflict.

"One of the most profound intellectual influences on Peter Thiel is a French thinker named Renee Girard."

This quote identifies Girard as a key intellectual influence on Thiel, indicating the importance of Girard's ideas in shaping Thiel's worldview.

High Agency Individuals

  • High agency individuals respond proactively to being told something is impossible.
  • They do not accept limitations and instead begin a conversation on how to overcome them.
  • This mindset is critical for entrepreneurs and those seeking to control their own destinies.

"How do you respond when told something is impossible? Is that the end of the conversation or the start of one?"

The quote challenges individuals to reflect on their response to perceived impossibilities, suggesting that high agency individuals see it as the beginning of a problem-solving discussion.

Prehistory of a Company

  • The formation of a startup is often a lengthy and complex process rather than a quick succession of steps.
  • Peter Thiel refers to the early, less visible stages of a company's development as its "prehistory."
  • This concept applies to both companies and conspiracies, where initial groundwork is laid without immediate recognition.

"Even Peter's hedge fund had been something he started before PayPal and only came back to after PayPal."

This quote illustrates the concept of a company's prehistory by showing how Thiel's ventures had early stages that were revisited or evolved over time.

Startups and Conspiracies

  • A startup is defined by Thiel as a small group united by a belief in an unconventional truth.
  • The formation of a conspiracy, like a startup, involves assembling a team around a shared belief and deciding on a course of action.
  • The initial group's shared conviction is the foundation for future growth and strategy.

"A startup is, in Peter's definition, a small group of people that you've convinced of a truth that nobody else believes in."

The quote defines a startup in terms of a shared, unconventional belief, drawing parallels to the nature of a conspiracy.

The Power of Last Action

  • Thiel values the strategic advantage of being the last to act, learning from the past to inform future decisions.
  • History shows the pitfalls of acting without a plan, and Thiel's approach is to carefully choose the moment to act.
  • Information asymmetry is key to Thiel's strategy, seeking unique insights that others do not have.

"You don't want to be the first to act. You want to be the last man standing."

The quote encapsulates Thiel's strategic philosophy of patience and timing, aiming to be the final, decisive player in a situation.

Hulk Hogan's Perseverance

  • Terry Bollea's (Hulk Hogan) life story exemplifies perseverance and the journey from humble beginnings to cultural icon.
  • Hogan's resilience in the face of challenges and his determination to succeed are highlighted as key attributes.
  • Gawker's underestimation of Hogan's fortitude was a critical oversight in their conflict.

"Terry has had an incredible run. The fat, awkward son of a pipe fitter, he travels from the docks of Port Tampa, Florida to become one of the most famous characters in American culture."

This quote summarizes Hogan's journey and underscores his determination and resilience, setting the stage for his role in the conflict with Gawker.

The Importance of Not Provoking Others

  • Provoking others, especially those pushed to their limits, can lead to dangerous and unintended consequences.
  • Gawker's business model of harming others for profit and page views is criticized as reckless and unsustainable.
  • The lack of empathy and understanding of the impact on real people's lives is highlighted as a major flaw in Gawker's approach.

"Anyone who is threatened and is forced by necessity either to act or to suffer becomes a very dangerous man."

The quote from Machiavelli warns of the potential danger in provoking individuals who feel threatened, relevant to Gawker's aggressive tactics.

  • The shift from federal to state court in the Hogan case against Gawker led to an unforeseen strategic advantage.
  • Florida law required a bond for appeals, which Gawker could not afford, potentially leading to their downfall if they lost the trial.
  • Gawker's lack of awareness of this "glass jaw" was a significant oversight.

"Gawker didn't even seem to be aware of its glass jaw."

The quote metaphorically points out Gawker's vulnerability, which they were oblivious to, highlighting the importance of understanding the full legal context.

The Mistake of Not Knowing Your Enemy

  • Gawker failed to recognize the seriousness of Hogan's intentions and the potential consequences of their actions.
  • The company's mockery of Hogan in internal communications showed a lack of understanding of the person they were dealing with.
  • An inability to properly assess the opponent's resolve and resources can lead to significant miscalculations.

"If Gawker had, in 2012 or in the years to follow properly sized up what was in front of them, perhaps they might have found a way to apologize and see the matter quickly fade away."

The quote suggests that Gawker's failure to accurately gauge Hogan's determination and legal strategy contributed to their eventual downfall.

Human Nature and the Gawker Case

  • The AJ Derulio deposition reveals a lack of empathy and understanding of public sentiment.
  • Gawker's actions, including publishing a sex tape and an intoxicated girl's assault video, demonstrate a disregard for privacy and humanity.
  • The reactions of the jury to the deposition indicated the emotional impact and disgust of Gawker's decisions.
  • Ryan Holiday suggests that Peter Thiel had a better grasp of human nature than Gawker.

"AJ's forced to go on a stand. And of course, Hulk Hogan's attorney is going to bring this up because that's for many people know, many people are not going to want you joking about sex tapes of five year olds. Rightfully so."

This quote exemplifies the lack of judgment exhibited by Gawker's AJ Derulio, which likely contributed to the jury's reaction and the high judgment against Gawker.

The Dangers of Screens and Dehumanization

  • Gawker's writers failed to see the humanity in the individuals they covered, viewing them as characters rather than people.
  • The digital detachment led to the publication of content without considering the real-life impact on those involved.
  • Hulk Hogan was seen not as a person who had suffered losses but as a caricature for public entertainment.

"When Gawker's writers looked at Terry Borlla, they did not see a man who had lost nearly everything and had been pushed to his breaking point."

This quote captures the core issue of Gawker's approach: the inability to recognize the human element behind the stories they published.

Hulk Hogan's Life and Losses

  • Hulk Hogan's personal losses, including a significant financial hit from his divorce, highlighted the depth of his struggles.
  • Gawker's publication of his sex tape added to his humiliation and loss of privacy.
  • The case illustrates the importance of understanding the personal battles individuals face, especially when they are public figures.

"His wife had taken 70% of their marital assets in the divorce settlement and promptly settled in with a younger man."

This quote outlines the personal and financial difficulties faced by Hulk Hogan, which were compounded by Gawker's actions.

Recklessness and Accountability in Business

  • Gawker's management showed a pattern of reckless behavior and poor judgment.
  • The deposition statements by Nick and AJ were indicative of a broader culture of irresponsibility within the company.
  • Peter Thiel observed these flaws and predicted they would lead to further errors in Gawker's business decisions.

"How you do one thing is how you do all things."

This quote, highlighted by Ryan Holiday, suggests that the behavior displayed by Gawker's representatives in legal proceedings reflected their overall business practices.

Strategy and Procrastination

  • Liddell Hart's maxims on strategy emphasize the importance of flexibility and adaptability in planning.
  • Peter Thiel's focus on the Hogan case as a strategic opportunity contrasts with Gawker's procrastination and lack of preparation.
  • The case demonstrates the necessity of committing to a course of action and the dangers of indecision.

"At some point, the word strategy becomes a euphemism for procrastination."

This quote highlights the critical moment when strategy must give way to decisive action, as exemplified by Thiel's approach to the Hogan case.

Perseverance and Understanding Your Enemy

  • Hulk Hogan's refusal to accept settlement offers from Gawker showed his determination and understanding of his own motivations.
  • The case illustrates the importance of knowing one's adversary and the potential consequences of underestimating them.

"They keep offering him more and more money. So at one point, they offer Hogan just here, we'll give you $10 million to go away."

This quote shows the increasing desperation of Gawker as they realized the severity of their miscalculation regarding Hogan's resolve.

The Contrast Between Peter Thiel's and Gawker's Approaches

  • Thiel invested in thorough preparation and research, while Gawker appeared unprepared and technologically inept in court.
  • The difference in approach highlighted the importance of attention to detail and the impact of complacency.

"Peter is spending tens of thousands of dollars on a battery of market research as the trial approaches."

This quote exemplifies Thiel's meticulous preparation for the trial, in stark contrast to Gawker's lack of similar effort.

The Role of Power in Business and Society

  • Ryan Holiday's analysis of Peter Thiel's actions reflects a broader discussion on the use of power and influence in business and society.
  • The Gawker case serves as a reminder of the real-world consequences of actions and the importance of understanding the dynamics of power.

"An immutable law of history: Actions have consequences."

This quote by Ryan Holiday encapsulates the central lesson of the Gawker case and the significance of understanding the interplay of power and responsibility in society.

Importance of Reading "Zero to One"

  • "Zero to One" by Peter Thiel is a book with practical ideas on creating a company.
  • It differs from other books that are mostly biographical, instead focusing on actionable business concepts.
  • The book is recommended as a must-read for understanding unique business strategies.

"So zero to one to me is a book that if you haven't read it yet, obviously read it from start to finish."

The quote emphasizes the value of reading "Zero to One" in its entirety for its business insights.

Contrarian Question

  • The contrarian question is a key concept introduced in the first chapter.
  • It challenges the interviewee to state an important truth that is unpopular.
  • The difficulty lies in intellectual and psychological barriers to thinking against the consensus.

"What important truth do very few people agree with you on?"

This question is used to gauge the interviewee's ability to think differently and challenge common beliefs.

Progress: Horizontal vs. Vertical

  • Horizontal (extensive) progress involves copying things that work (1 to n).
  • Vertical (intensive) progress involves doing new things (0 to 1).
  • Vertical progress is associated with technology, while horizontal is likened to globalization.

"Horizontal or extensive progress means copying things that work, going from one to n; vertical or intensive progress means doing new things, going from zero to one."

This quote distinguishes between two types of progress, highlighting the innovation involved in vertical progress.

Technology vs. Globalization

  • Thiel's contrarian answer emphasizes technology over globalization.
  • Technological progress is crucial to avoiding negative consequences like pollution.
  • The future is more likely to be defined by technological advancements than by spreading existing methods.

"Most people think that the future of the world will be defined by globalization. But the truth is that technology matters more."

Thiel argues that technological innovation is more significant for the future than the spread of current practices.

Four Principles for Entrepreneurs

  • Silicon Valley learned four principles from the dot-com crash.
  • Thiel offers contrarian principles that challenge these learnings.
  • The contrarian principles suggest boldness, planning, avoiding competition, and valuing sales.

"Make incremental advances. Stay lean and flexible. Improve on the competition. Focus on product, not sales."

These principles reflect the conventional wisdom in Silicon Valley post-dot-com crash.

Importance of Monopolies in Business

  • Thiel advocates for creating unique monopolies that capture value.
  • He differentiates between dynamic monopolies like Google and static monopolies of the past.
  • Dynamic monopolies are not about price-gouging but about creating and capturing new value.

"Create some kind of unique, dynamic monopoly where you're creating value for other people, but you're capturing that value."

This quote summarizes Thiel's philosophy on the importance of building a business that both creates and captures value.

Differentiation vs. Undifferentiated Competitors

  • Differentiation is key to business survival and impact.
  • An undifferentiated business is easily replaceable and does not contribute uniquely to the industry.
  • Businesses should strive to create a unique offering that cannot be easily replicated.

"If your industry is in a competitive equilibrium, the death of your business won't matter to the world."

This quote reflects the idea that businesses should avoid becoming undifferentiated in a competitive market.

  • Naval Ravikant's tweet storm offers insights into creating wealth and impactful businesses.
  • Key points include seeking wealth, not just money or status, and owning equity.
  • Specific knowledge, accountability, and leverage are essential for success.

"You're not going to get rich renting out your time. You must own equity, a piece of a business, to gain your financial freedom."

Naval emphasizes the importance of owning a part of a business rather than trading time for money.

Education and Individuality

  • Thiel critiques the one-size-fits-all approach to education.
  • He believes that individual talents and preferences should be considered in learning.
  • The traditional education system can stifle creativity and force conformity.

"We teach every young person the same subjects in mostly the same ways, irrespective of individual talents and preferences."

This quote criticizes the conventional education system for not accommodating individual differences.

Durability of Business

  • Long-term durability is as important as short-term growth for a business's value.
  • Entrepreneurs should focus on the sustainability and future relevance of their company.
  • Investment in aspects of business that remain constant over time is crucial.

"For a company to be valuable, it must grow and endure."

Thiel emphasizes the importance of both growth and endurance for a company's lasting value.

Starting Small and Focusing

  • Starting with a small, focused market can be more effective than targeting a broad audience.
  • A definitive view in business involves having strong convictions and a focused approach.
  • Entrepreneurs should aim to be a "monopoly of one," excelling in a specific niche.

"A definitive view, by contrast, favors firm convictions."

This quote supports the idea of having a clear, focused strategy in business.

Man and Machine

  • The combination of human and machine is more valuable than replacing humans with machines.
  • Technology should be seen as a complement to human abilities, not a competitor.
  • The most valuable companies use technology to enhance human strengths.

"The most valuable companies are not the ones that eliminate man with a machine. The most valuable ones are the combination of both."

Thiel argues for the synergistic use of technology to amplify human capabilities.

The Founders Paradox

  • Founders can be both insiders and outsiders, with unique visions that drive their companies.
  • The paradox lies in their eccentricities and extreme behavior, which can be both beneficial and detrimental.
  • Founders are essential for creating new value and cannot be easily replaced by professionals.

"The most important task in business, the creation of new value, cannot be reduced to a formula and applied by professionals."

This quote highlights the irreplaceable role of founders in driving innovation and creating new value in business.

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