PALO ALTO, Calif., March 6 (UPI) -- Valley View from time to time profiles a Silicon Valley Ace. All such Aces will not be famous or well-known but they will be worthy of admiration.
California native Peter Thiel was the co-founder of PayPal, the online payment system purchased by eBay for $1.5 Billion in 2002. Founded in Palo Alto, Calif., in 1997 and the only successful technology initial public offering of 2001, PayPal was able to achieve profitability at a time when most local companies were in a huge slump.
Surrounded by failing start-ups, technology and real-estate industries correcting themselves after grotesque over-expansion, and crashing stock portfolios, many Silicon Valley entrepreneurs were pretty glum about their business prospects in 2001 and 2002. Not Peter Thiel.
In summer of 2002, Thiel's sleek silver Ferrari bedecked the PayPal corporate parking lot in Mountain View, CA, surrounded by other luxury and sports cars of the company's employees, attesting to the success they'd achieved over the past four years.
"Friends told me I was crazy" to leave a secure, respected position at a top New York law firm, Thiel says of his decision to try his luck as an entrepreneur back in his home state of California in 1997. Marked by a quiet but palpable confidence, his smile suggests he didn't see nearly as much risk in his endeavor as did others.
Of his background, "I was very challenged to think about a wide range of difficult problems," says the 35 year-old Thiel. He received his B.A. in philosophy from Stanford University, and also got his J.D. at Stanford.
PayPal started off as a person-to-person program for personal digital assistants, that allowed money to be stored in an electronic form and transferred wirelessly. When this didn't become popular, several other methods of electronic currency were attempted, until the final form of the product was reached. The service now has more than 16 million users, and provides a secure online paradigm of money transfer using credit cards and/or bank accounts.
A large part of PayPal's success was tied to its "ability to provide a useful service that is significantly more convenient" than anything else available, along with its ability to grow rapidly -- at an "exponential pace", according to Thiel. (A future installment of Valley View will reveal stories of PayPal as a start-up company and its transition to a medium-sized public corporation.)
Given his success with PayPal, what would he have done differently if he had to do it again?
"I would have done things even more the way I did them," says Thiel. "I'd focus early on in building PayPal on hiring even more of the best people we could get." With "20-20 hindsight", you know where you succeeded, and which avenues were false starts -- "I'd have been more focused on what worked," he said.
How have Thiel's experiences affected his views on the world and his politics? "Well, I was pretty libertarian when I started. ... I'm way libertarian now," he begins to explain. Thiel is an accomplished writer, featured in the Hoover Institution's book, "The International Monetary Fund -- Financial Medic to the World?" and co-author of "The Diversity Myth," about his experiences at Stanford. With regard to specifics... "I don't think it would be prudent to articulate specific views." Apparently ex-chief executive officer's know when it's best to keep their lips sealed.
Before he was CEO, Thiel wasn't always so tight-lipped about his politics. In 1987 he founded an outspoken student paper, The Stanford Review, during his undergraduate years at Stanford University. The paper was founded in response to the "intolerant and overwhelmingly politically correct liberal atmosphere" Thiel and his colleagues encountered on campus. When Stanford Review board members expressed their admiration that the paper was still running so many years later, they say, Thiel noted that he'd strongly suspected it would still be around. Apparently, he builds organizations to last.
Aside from his involvement in politics, Thiel also excels in chess, where he is one of the nation's top players as a Senior Master. Staff at the Stanford Review recall in their organization's lore a story in which Thiel became overconfident, and was defeated in a public game of chess by another staff member. It is perhaps a statement of his general excellence and constant drive for perfection that an organization would recall, many years later, a small moment of his failure.
Thiel is currently the managing member of Clarium Capital, a money management firm, where he works at his new office in the Bank of America building in San Francisco. He plans on staying involved in the entrepreneurial spirit of the area by incubating new start-up companies along with his money managing activities.
Although Thiel was reluctant to discuss politics, he did have a comment on the bright future he sees for Silicon Valley.
Tough times won't last for too long here in the cradle of the Information Age, he suggests, by reduction from the inertia of several decades of U.S. economic success. "The only way the economy grows is through technology and innovation," explains Thiel. "If Silicon Valley and what it represents doesn't continue to grow, that's a problem for the U.S. in general."
(Valley View is a periodic look at the world from the viewpoint of the tech-savvy in Silicon Valley. Joe Lonsdale has worked in Silicon Valley senior management for 25 years. Joseph Lonsdale was recently editor-in-chief of the Stanford Review.)