The meaning behind Peter Thiel’s “Aim for monopoly.”
He is the…
- Co-founder of Paypal.
- First outside investor for Facebook/Meta.
- Founder of the Thiel Foundation (name kind of gives it away.)
- Managing director of VC firm Founders Fund (which helped fund companies like Airbnb and SpaceX.)
- The #1 New York Times bestselling author of Zero to One.
The stats all lead to the one and only Peter Thiel.
Now, I’m not here to give you a biography of Peter Thiel or a summary of his book (Zero to One). I’m here to explain one of Thiel’s biggest philosophies/sayings/whatever you might call it.
Aiming for monopoly.
This article is organized into 3 parts:
- What is Monopoly?
- Why we should be aiming for monopoly? + The key behind starting a monopoly.
- Applying monopolies to life.
Feel free to jump around and explore the sections in whichever way you choose.
What is Monopoly?
Monopoly’s a business term.
It’s also a board game.
I’m here to talk about both and how the two relate to each other (yayyyy!)
Monopoly in relation to business
“The exclusive possession or control of the supply of or trade in a commodity or service.” — Oxford Language definition
In simpler terms, it means you have control over a certain market.
Think of Google. It has control over the search/advertising industry, some might even go as far to say the internet as well.
You would think every company wants to become a monopoly right?
What’s the opposite of monopoly you may ask?
Well, Thiel argues its competition.
When you think about it, you can’t have complete control over something you’re fighting with others for, right?
If you’re the 5th bake shop on your street, its highly unlikely you’re distinguishing your shop from others in such a way that you can call yourself a monopoly.
The weird thing about this whole monopoly vs. competition thing is that each side is claiming its the other.
Huh?
Let me explain.
Thiel noticed that non-monopolies claim that they’re in a narrow market. Trying to convince others (investors, potential customers. etc) that they have control over a specific market.
He also noticed that anybody who has a monopoly will claim they don’t have a monopoly, claiming that they’re in a huge market. This is mainly because they’re avoiding government regulation.
The two monopolies meet at last
How does the monopoly above compare to the board game, Monopoly?
Well the similarities start with the name.
The monopoly board game was named Monopoly, because it directly relates to the economic term monopoly.
If you think about the game, the only way it ends is by one player achieving ownership of everything, meaning the other players have gone bankrupt.
Monopoly starts off fairly competitive, with everybody having a pretty solid chance of winning the game, but one player has to outsmart their way to the top, distinguishing themself from the rest.
Luckily the board game is still only a game, so the road to victory isn't as strenuous as in the world.
So, now that we know what monopoly is, lets dive a little deeper into why we should aim for it and how to get there.
Why we should be aiming for monopoly + how do you get there?
Obviously everything has their pros and cons and a key downside was mentioned above, but despite that, the pros can outweigh the cons (depending on how you look at it.)
Why aim for monopoly?
There are obvious incentives for becoming a monopoly, like the fact that you’re eliminating competition, maximizing profits, the list goes on.
But, if you’re looking for some other reasons that Thiel explicitly states, you can check out some below:
- Incentive to innovate.
- Stable, long-term planning.
- Deeper project financing.
- Symptomatic of creation.
The key behind becoming a monopoly
Thiel loves to bring up the fact that every important business moment only happens once.
The next Mark Zuckerberg wont build another Facebook.
The next Elon Musk wont build another SpaceX or Tesla.
When you start framing your mindset around the copying these innovators you’ve already started wrong.
You should be working on a problem nobody else is working on.
It's good to think of the problem from a first-principles perspective. Looking deeper and deeper until you’ve found a fundamental truth, eventually using that as your base to work up from. If you’d like to learn more about this mindset check out this article.
This problem should be an important problem that you’re not only passionate about, but also a problem that is unique and may be overshadowed for some reason.
So, essentially the key behind starting a monopoly is working on a unique, important problem, that not many people are working on.
Applying this to life
Monopolies don't just have to apply to the business world, they can also apply to your life.
One key thing about monopolies is the fact that they have control over a specific market. Even though you may not be controlling a market, you are indeed in control of your life.
Sometimes we forget this though.
We favor other people’s opinions and advice, and let those things determine the decisions we make about your life.
Successful monopolies don't have much competition if any at all, so there shouldn’t be many people beside yourself competing to control of your life.
There will never be another person exactly like yourself, and that should be all the reason to convince yourself to stop trying to be like others and start trying to be like yourself.
TL;DR
- Monopoly means you have control over a certain market.
- The opposite of monopoly is competition.
- Similar to the monopoly board game, you come out having primary ownership over all things in the market.
- Important business moments only happens once.
- The key behind starting a monopoly is working on a unique, important problem, that not many people are working on.
- Monopolies benefit by eliminating competition, maximizing profits, etc.
- In relation to life, successful monopolies eliminate competition, like how you should limit the amount of people in control of your life.
Thanks reading! I hope you now have a better understanding of what monopolies and how to apply them to your life. If you’re interested in learning more about Peter Thiel and his thoughts on business, you can check out this Notion page with some more resources relating to Peter Thiel’s work.
Hey, I’m Ciara, a 14-year-old interested in how the combination of AI and VR/AR can create an innovative impact on the education system. I’m a part of a youth-accelerator program, TKS, that develops young people like myself to solve some of the world’s biggest problems. I’m also the co-host of the TechnoGypsie podcast, a podcast that gives people the inspiration, knowledge and resources to impact the planet using STEM. When I’m not working on projects, you can find me playing basketball, reading a good book, learning about philosophy, or talking with friends. I also started my journey with veganism in May of 2021, so if you have any cool vegan recipes let me know!
