I just read Peter Thiel’s new book “One to Zero”. You know Peter Thiel right? Co-founded Paypal, founded Palantir, well-known for his scholarships that give chosen entrepreneurs $100,000 if they quit college and start a company. Quite a guy.
The book is really a series of reflections on innovation and entrepreneurship whose quality varies more than his startups have. But nonetheless there are some nuggets. The main one is his contention that an innovator has only one job; to create a monopoly. Everything else is bunk.
In his book, competition is bad; it’s for losers. That’s because no-one really hits it big when you compete; if you have to compete what this really means is that you weren’t smart enough to think of something so tremendously original that no-one else could think of it and so you are doomed to eke out your miserable existence having to compete against other losers who were just as miserably stupid as you were. On the other hand monopolists have had a breakthrough idea that no-one else can match and so deserve the outsize rewards that pour upon them from high. Like on Peter Theil in fact from Paypal, Palantir and many others.
It’s a disruptive thesis and appropriately iconoclastic, coming from a man who is justifiably regarded as one of a kind. In the same class as Bill Gates, Steve Jobs, Larry Page and Sergei Brin, all themselves currently or erstwhile monopolists. It’s another way of defining an innovator; one who creates a monopoly through being defiantly original as he quotes from Goethe’s Faust:
”The few who knew what might be learned
Foolish enough to put their whole heart on show
And reveal their feelings to the crowd below
Mankind has always crucified and burned”
So here’s the nub; how do you actually identify an innovator? It’s something I have visited before (“Are you confusing creativity and innovation?”) As I pointed out there, creativity is not the same thing as innovation, and innovation actually comes from innovators, of whom there aren’t very many. Actually Thiel also visits this topic and, oh so tactfully, hints that innovators are born, not made, although he is much too polite (and politic) to say it out aloud.
It’s a strange thing that, despite the trillions of words that have been penned about innovation and innovators, no-one has actually come up with a test to identify innovators. Hmm, except my own company (see our “High-Potential Innovator™ Program (HIPI)”) which uses one of our proprietary assessments (the Financial Outcome Assessment™) to do just that.
There is the Watson-Glaser test, but this is really supposed to identify creativity, which is absolutely not the same thing an innovation. Really it’s for people who are good at doing puzzles which is an admirable trait but doesn’t create monopolistic colossi unless you have something else really big going for you.
And it’s not that we don’t have a huge number of gifted entrepreneurs in the US. Most small companies and franchises are owned by entrepreneurs but the overwhelming majority of these aren’t innovators. And actually it’s also true that the vast majority of innovators aren’t entrepreneurs because most of them fail, or don’t want to even try because it’s a hard thing to do. It’s much easier to sit and vegetate in bigco or the government rather than to go out and expose yourself to ridicule, just as Goethe’s Faust floridly points out.
Yet the potential monopolist-innovators continue to emerge and challenge the status quo. Elon Musk with SpaceX attacking the defense companies and NASA (not to mention his Tesla challenging global auto manufacturers). Jeff Bezos whose space launch company Blue Origin was just selected with Boeing to create the next generation of space launchers for NASA (so what’s an online retailer got to do with space travel, huh?)
That’s the nice thing about being a monopolist. Once you have created one monopoly you get the taste for others. It’s a healthy addiction to showing that you have found another way to stick it to people who aren’t smart enough to avoid having to compete that keeps you going.
So what’s the lesson? To be a true innovator you have to be really, really defiantly different. If it’s been thought of before, you’re not the man or woman for the job. Your job is to monopolize, not to compete. Dare to be different.