Peter Thiel Hates a Copycat

The billionaire’s extreme contrarianism is the secret to his success.

Illustration with greenish checkerboard of squares revealing photo of Peter Thiel
Illustration by Alex Merto; source: John Lamparski / Getty

This fall, Peter Thiel will celebrate his 54th birthday. He has already lived more lives than most mortals can imagine. He has been a Wall Street lawyer, a hedge-fund trader, a Silicon Valley entrepreneur, and a fabulously successful venture capitalist. The team he led at PayPal, the online-payments company he co-founded in 1998, is so influential in the Valley that its alumni are known as the “PayPal Mafia.” Zero to One, his provocative 2014 manifesto on innovation and start-ups, has sold more than 3 million copies globally. He was the most prominent tech titan to back Donald Trump in 2016 and remains a lavish supporter of Trumpish Senate candidates. Ambitious to avoid death, or at least postpone it, he has flirted with ideas for freezing brains for future reanimation and for transfusing the middle-aged with the blood of the young.

Thiel is, in other words, a gift to a biographer. Yet he also presents challenges. For one thing, he is a fierce guardian of his privacy: After the scurrilous blog Valleywag outed him as gay, Thiel financed a lawsuit that bankrupted its parent company, Gawker Media. For another thing, the profiler must decide which Thiel is the salient one—which of his many and varied pursuits cut to the essence of his character. And because biography aspires to capture not just the figure but the landscape—the life, but just as crucially the times—the author must also judge which of Thiel’s projects matter to the rest of us. Max Chafkin, a Bloomberg journalist, wrestles with these choices in The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power. The title hits the mark. The subtitle causes difficulties.

In the first part of his book, Chafkin presents Thiel’s immigrant roots as the key to his contrarianism. The young Peter’s German parents moved from Frankfurt to Cleveland, then to South African–controlled Namibia, then back to Cleveland, then eventually to California. Thiel bounced between schools, including a German-language Grundschule in the desert town of Swakopmund, unsurprisingly emerging as a self-contained loner. When the family settled in a San Francisco suburb, Thiel remained aloof from his peers, seeking solace in academic superiority. He immersed himself in science-fiction and fantasy novels, later bragging that he had memorized the Lord of the Rings trilogy, Chafkin writes. Slender and small as well as brainy and haughty, he was a target for bullies. In high school, his classmates amused themselves by stealing for sale signs from neighborhood front yards and planting them outside Thiel’s house.

Upon enrolling at Stanford in 1985, Thiel fit in no better. The residence halls had sundecks filled with half-dressed students. Thiel rose early, dosed himself fastidiously with vitamins, and achieved a perfect grade point average his first semester. Perhaps inevitably, the bullying continued. Chafkin unearths a story about a roommate who, following an argument with Thiel, taped a mock commemorative sign to the ceiling: under this spot, peter thiel first said the word fuck. Only at the end of the semester did someone point out the sign to its victim. Mutely, Thiel moved his desk into position, climbed up, tore the sign down, and went home for the summer.

Thiel eventually figured out a way to get even with his persecutors. He bulked up by lifting weights, and found a circle of friends who were similarly outside the hedonistic mainstream. He joined the College Republicans and discovered the libertarian writings of Ayn Rand. He co-founded a combative conservative monthly, The Stanford Review, which ripped into the liberal consensus on campus. A typical Review diatribe denounced a faculty plan to add nonwhite authors to a course on Western culture. Another railed against supposedly Marxist professors—years later, Thiel would insist that universities were “as corrupt as the Catholic Church of 500 years ago.” His provocations were especially caustic, one imagines, because they came from a place of pain. Hard-edged conservatism was not just an undergraduate game. It was a survival strategy.

Thiel’s conservative awakening converged with a subtler discovery. He came under the influence of the Stanford philosopher René Girard, who placed the imitative instinct at the center of human behavior. In Girard’s telling, imitation generated conflict, as people fought for the same things—the same jobs, schools, and material possessions—even though such trophies would fail to make them happier. Life, Thiel eventually would come to realize, could be cast as a struggle to escape the false siren of copycat cravings. To be free, you had to carve your own path. You had to be a contrarian.

After completing his undergraduate studies, Thiel was not yet ready to live by Girard’s philosophy. He chose the easy path to affirmation for a superstar student: He excelled at Stanford Law School, clerked at a federal appeals court, then joined the Wall Street law firm Sullivan & Cromwell. But again he had difficulty settling in. Prickly, self-certain, and contemptuous of mainstream views, he quit the firm after less than a year. Thiel’s next stop was the derivatives-trading desk at Credit Suisse. He walked out after a few months, saying that he planned to take up independent hedge-fund trading. Suffering what he later called a “quarter-life crisis,” he fell back on the polemics of his Stanford Review phase, co-writing a book called The Diversity Myth: Multiculturalism and Political Intolerance on Campus and taking aim at, among other targets, “militant homosexual activists.” Later, though only after he was outed, Thiel made peace with his sexual identity, marrying in 2017 and becoming a father. But his early struggles with his personal life may have fueled his restless appetite for provocation.

Despite his limited access to Thiel, Chafkin succeeds in shedding light on his subject’s formative experiences. But then he faces the hard choice: Which of the mature Thiel’s multifarious exploits deserve emphasis? Somewhat dutifully, Chafkin covers the rise and fall of Thiel’s hedge fund and the creation of PayPal, which anticipated today’s digital-money boom and which Thiel sold to eBay in 2002, exiting with $55 million. But the theme that commands Chafkin’s keenest attention is the one promised in his subtitle. He aims to demonstrate that Thiel’s goal is “real power, political power.” This, Chafkin insists, is what makes his subject special—and frightening.

Chafkin’s choice is understandable. Thiel comes closer than other Republican moneymen to articulating an alt-right worldview: hostile to open trade, supportive of anti-immigration candidates, hawkish on Communist China, and furiously critical of liberal political correctness. As early as 2009, several years before populist authoritarianism had darkened the horizon, Thiel wrote, “I no longer believe that freedom and democracy are compatible,” lamenting that “the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of ‘capitalist democracy’ into an oxymoron.” At the time, with Barack Obama in the White House, Thiel proposed to evade the alleged threat of big government by leaving politics behind. “By starting a new Internet business, an entrepreneur may create a new world,” he suggested. But by 2016, when Trump secured the Republican nomination, Thiel was ready for partisan combat. Seeing in Trump a vehicle to destroy the liberal political establishment, he donated $1.3 million to the candidate’s campaign and related groups, and delivered a prime-time address at that year’s Republican convention. Given the costs of Trumpism, past and probably future, Thiel’s politics present rich terrain for a biographer.

There is a catch, however. At least as of now, showing that Thiel’s political machinations have made a difference is hard. His $1.3 million donation pales next to the tens of millions spent by the hedge-fund billionaire Robert Mercer on the Trumpian right during the 2016 cycle. As Chafkin points out, Thiel’s efforts to advise on personnel choices after Trump’s election—he proposed about 150 candidates for administration jobs—were mostly rebuffed. Only a dozen or so of his picks were accepted, none for positions senior enough to require Senate confirmation. Later, once Trump was in the White House, Thiel’s ties to him gradually withered. By 2020, frustrated with the bungled response to the coronavirus and sensing that Trump’s chances were dim, Thiel declined to give money to the president’s reelection bid and didn’t speak at the convention.

Seeking nonetheless to build a case for Thiel’s political salience, Chafkin takes a fateful turn. He tortures the evidence to make it scream louder. His first gambit is to amplify Thiel’s role at Facebook, whose failure to police fake news aided Trump’s 2016 victory. Citing unnamed critics of Facebook’s chief, Mark Zuckerberg, the author floats the theory that Thiel was behind the company’s refusal to restrict Trumpian posts. Thiel was “the puppet master: pushing a younger, ideologically uncertain founder toward an alliance with an extremist wing of the Republican party.” Thiel was indeed the first professional investor in Facebook and remains a Facebook board member, but neither connection lends plausibility to the notion that the headstrong Zuckerberg behaved as his puppet.

Journalists with good access to Zuckerberg’s circle, such as the former Fortune writer David Kirkpatrick, have documented the entrepreneur’s fierce independence. Thiel, for his part, is famous in the Valley for not influencing start-up founders, preferring to give them a free rein. “Just don’t fuck it up” was his main advice to Zuckerberg when he invested. Besides, even if Thiel had wanted to sway Zuckerberg, as Chafkin’s sources contend, he would have been playing a weak hand. Most of Facebook’s other directors at the time were Trump critics, and in any case, because of Facebook’s share structure, Zuckerberg enjoys near-total control over his company. The truth is that Facebook was slow to police misinformation on its platform for reasons independent of Thiel. Zuckerberg believed strongly in the principle of free speech—and even more strongly in maximizing profits.

Chafkin is also determined to assert that Thiel’s support for Trump served his broader drive for power—that it explains the rise of Palantir, a Thiel-backed software provider with ties to the defense establishment. But this too is implausible. Founded in 2003, Palantir was already flourishing before Trump’s election. During Obama’s second term, its revenues multiplied 3.5-fold and it attained a valuation of $20 billion, making it the world’s fourth-most-valuable private tech company. Under Trump, however, Palantir’s revenues and valuation grew more slowly. As the then-chair of Palantir, Thiel doubtless sought to help the company win government contracts. But when Palantir went public in the fall of 2020, it had yet to turn a profit.

Chafkin’s exaggerations are doubly unfortunate. Thiel is indeed a financier of the Republican right, and perhaps he will emerge as a kingmaker with real power in some future political cycle. This year, he has increased his donations to conservative Senate candidates and invested in Rumble, a video-sharing platform that has become a safe space for right-wing voices. But drawing dubious connections does nothing to advance this point, and meanwhile Chafkin’s political emphasis obscures another part of his subject. Thiel’s approach to venture capital gets short shrift in his book. Yet venture investing is where Thiel’s contrarianism has yielded the clearest rewards—and where his impact on the world is arguably strongest.

Even by the contrarian standards of Silicon Valley, Thiel’s investment style is bracing. Perhaps because of René Girard’s influence, he draws an especially stern distinction between copycat start-ups, which he disdains, and truly original moonshots, many of which will fail but some of which will open up a whole new industry. The easy path for any company founder is to do more of something familiar (as even Thiel has been known to do—with Rumble, for example, a YouTube imitator). By contrast, there is no certain formula for generating novel technologies or products, but Thiel has hit upon a playbook that evidently works, and that undoubtedly derives from his years at Stanford. He rails against established wisdom. He reasons from first principles. He embraces headstrong misfits. As he argues in Zero to One, entrepreneurs who aren’t radically unusual will create businesses that fall into Girard’s trap. They will come up with sensible plans, which, being sensible, will have also occurred to others. They will not break the mold or deliver new social value. Facing competition, they will fail to extract profits.

Thiel’s greatest start-up hits share no particular industry theme, but most reflect this appetite for radical outsiderism. The early PayPal employees were proud rebels. Facebook was led by an arrogant, taciturn 20-year-old and his sidekick, a pitchman named Sean Parker who had been in trouble with the law and had been ousted from his previous company. Palantir represented a bet that a start-up born with the Valley’s superior coding DNA could win business from the Pentagon, despite the defense establishment’s habit of awarding nearly all lucrative “program of record” contracts to old-line members of the military-industrial complex. Meanwhile, the SpaceX founder Elon Musk had a mile-wide crazy streak that Thiel had experienced firsthand. One time, with Thiel in the passenger seat, Musk crashed his McLaren sports car, then admitted that he had failed to insure it. Undeterred, Thiel gave the go-ahead for his fund to buy about 4 percent of Musk’s company.

Thiel’s improbable bets have earned him a personal fortune of almost $5 billion, according to Forbes. They have also made him a spokesperson for a special way of coming at the world, in which the expert consensus is continuously assailed by mavericks. Some of the resulting innovation has had mixed social effects: Facebook has fostered screen addiction as well as fake news, segmenting society into like-minded groups (and encouraging the unthinking conformity that Thiel rails against). But the weight of academic evidence leaves no doubt that Thiel’s moonshot mentality is a desirable tonic. Only a fraction of 1 percent of firms in the United States receive venture-capital backing, but this tiny minority accounts for fully 47 percent of the nonfinancial companies that do well enough to stage an initial public offering, not to mention 89 percent of R&D spending by all nonfinancial companies that go public. Other research confirms that more venture investment leads to more patent filings, and that VC-funded patents are more significant than average. A remarkable 22 percent of VC-backed patents are in the top 10 percent of the most-cited patents.

Silicon Valley’s moguls fell from grace some years ago, for understandable reasons. Thiel stands as an invitation to critics who want to turn the heat up even more, to argue not merely that Big Tech is monopolistic and tax-evading and invasive of our privacy, but that it is a threat to democracy. Yet as the geeks come to be seen as villains, we should also remember that they remain simultaneously heroes; the surest way to break Facebook’s power is for a venture capitalist to back an entrepreneur who comes up with a better kind of social networking. Thiel’s contrarianism may be alarming in its reactionary Stanford Review guise. But an aversion to imitation and a willingness to commit capital to long-shot ideas are also the special forces that drive the most dynamic part of our economy.

This article appears in the October 2021 print edition with the headline “Peter Thiel Hates a Copycat.”