The Philosophical Insights Fueling Peter Thiel's Wealth Journey
Written on
Chapter 1: The Genesis of a Billionaire
Before achieving billionaire status, Peter Thiel delved into philosophy during his undergraduate studies.
Co-Founders of PayPal: Peter Thiel and Elon Musk
Peter Thiel's net worth currently stands at an impressive $7.36 billion. His credentials include a law degree, bestselling authorship, and the founding of several billion-dollar enterprises, alongside being a highly ranked chess player.
In 1999, Thiel co-founded PayPal with Max Levchin, which later merged with Elon Musk’s X.com. The company was sold to eBay for $1.5 billion in 2002, netting Thiel a cool $55 million.
You might ask yourself: How did he transform that $55 million into a staggering multi-billion dollar fortune? The answer lies in one groundbreaking investment: Facebook.
Thiel was the first external investor in Facebook, committing $500,000 in 2004 and acquiring roughly 10% of the company. This investment ballooned to a remarkable 200-fold in just eight years, yielding an annual average return of 159%. By 2012, Thiel had divested nearly all his Facebook shares, officially entering billionaire territory.
What was the rationale behind Thiel's investment?
At first glance, this decision seemed irrational. Facebook was a nascent and experimental platform. When Thiel invested his $500,000, Facebook featured only eight functionalities, permitted just one photo per profile, and was restricted to Harvard students.
So how did Thiel foresee this as a promising investment?
Facebook operates as a machine of mimetic desire. The appeal of social media is, on the surface, perplexing. Why are humans inclined to view photos of strangers on screens?
During his time at Stanford, Thiel studied philosophy under the renowned thinker René Girard. Girard's concept of “Mimetic Desire” sheds light on the success of social media. This theory posits that people desire things primarily because others do.
Consider this: if no one else desired something, would you? If your acquaintances showed no interest in family, luxury cars, or high-end fashion, would you? Girard argues that the answer is no.
As social beings, our aspirations are shaped by those we admire. In today's increasingly secular society, our role models are often fellow humans rather than religious figures.
This notion elucidates the profound influence of social media 'influencers' on contemporary culture. If mimetic desire were not a driving force, why would anyone care about the opinions of figures like Andrew Tate or Kim Kardashian?
Social comparison is a fundamental aspect of human nature. Facebook capitalizes on our innate need for this comparison, offering a platform for constant engagement with updates and images from millions worldwide.
This platform facilitates perpetual social comparison, accessible anytime from your mobile device.
Having learned about mimetic desire through Girard's teachings, Thiel recognized that Facebook essentially serves as a vehicle for monetizing this human inclination. While Facebook may not be at its pinnacle, social media's significance and influence have only intensified.