Peter Thiel is a name that resonates throughout Silicon Valley and beyond. He's a tech entrepreneur, venture capitalist, and political provocateur who has left an indelible mark on the modern world. In "The Contrarian," Max Chafkin delves into the life and mind of this enigmatic figure, tracing his journey from a chess-playing prodigy to a powerful influencer in both technology and politics.
Thiel's story is one of contradictions and complexities. He's a man who champions innovation yet harbors deep skepticism about progress. He's a libertarian who has supported authoritarian measures. He's a tech mogul who has criticized the very industry that made him wealthy. Through Chafkin's exploration, we gain insight into not just Thiel's personal history, but also the forces that have shaped Silicon Valley and modern American politics.
This book offers a fascinating look at a man who has been at the forefront of some of the most significant technological and political developments of our time. From the founding of PayPal to his controversial support of Donald Trump, Thiel's story is intertwined with the broader narrative of 21st-century America.
Early Life and Education
A Brilliant but Isolated Youth
Peter Thiel was born in Frankfurt, Germany, in 1967. His family moved to the United States when he was just a year old, eventually settling in Foster City, California. From an early age, Thiel stood out for his exceptional intelligence. He excelled academically and quickly found himself on a "gifted and talented" track at school.
However, Thiel's brilliance came with a social cost. He was often isolated from his peers, developing a reputation for arrogance. One classmate recalled that Thiel seemed to walk around with an expression that said, "Fuck you, world." This early experience of being an outsider would shape Thiel's worldview and his later political beliefs.
The Influence of Fantasy and Science Fiction
Young Peter found solace and inspiration in the worlds of fantasy and science fiction. He was an avid player of Dungeons & Dragons, often taking on the role of the narrator. This experience of creating and controlling imaginary worlds would later influence his approach to business and politics.
Thiel was also deeply influenced by the works of J.R.R. Tolkien and Isaac Asimov. Tolkien's epic tales of good versus evil and the power of individuals to shape destiny resonated strongly with him. Asimov's futuristic visions of advanced technology and space exploration sparked Thiel's interest in pushing the boundaries of what was possible.
These early passions would continue to influence Thiel throughout his life. His later business ventures and political ideas often reflected themes from these fantasy and sci-fi worlds, blending ambitious technological goals with a desire to reshape reality according to his vision.
Stanford and the Birth of a Conservative
Thiel's time at Stanford University was pivotal in shaping his political ideology. He arrived expecting an elite, studious environment but instead found what he perceived as a party atmosphere that disappointed him. This disillusionment with his peers and the university culture pushed Thiel towards conservative politics.
In response to what he saw as the moral laxity of his fellow students, Thiel developed a ritual of taking vitamins each morning, setting himself apart as disciplined and superior. This behavior earned him ridicule from his peers, further cementing his outsider status and his growing antipathy towards what he perceived as liberal culture.
During this time, Thiel became drawn to libertarian ideas, reading works by Ayn Rand and developing a provocative political stance. He founded the Stanford Review, a right-wing campus newspaper that often criticized the university's policies and what Thiel saw as its left-wing bias.
One of Thiel's major grievances was against multiculturalism and what he termed "political correctness." When Stanford planned to diversify its Western Culture course by including non-white authors, Thiel's Review strongly opposed the move, framing it as a threat to traditional Western values.
Thiel's experiences at Stanford solidified his self-perception as a persecuted conservative minority on a liberal campus. This sense of grievance against the "liberal elite" would become a driving force in his later political activities. However, it's worth noting that some of Thiel's contemporaries remember Stanford in the 1980s as having a significant conservative presence, suggesting that Thiel's perception may have been somewhat skewed.
The Birth of PayPal
From Law to Tech
After graduating from Stanford, Thiel initially pursued a career in law. He worked as a clerk for a judge and then as a lawyer for Sullivan & Cromwell. However, he soon found himself drawn to the world of finance, working as a derivatives trader for Credit Suisse in New York.
It was upon returning to California that Thiel found his true calling. Witnessing the burgeoning tech scene in Silicon Valley, he saw an opportunity to combine his business acumen with his libertarian ideals. This led to his fateful meeting with Max Levchin, a brilliant young software engineer.
PayPal: A Libertarian Dream
In December 1998, Thiel and Levchin founded Confinity, which would later become PayPal. The initial concept was a digital wallet that could serve as an alternative to paper money, starting with transactions on PalmPilot devices. However, Thiel quickly realized the broader potential of the platform.
For Thiel, PayPal represented more than just a business opportunity. It was a chance to put his libertarian principles into practice. He envisioned PayPal as a way to give everyone the equivalent of a Swiss bank account, allowing individuals to move money freely without government interference. This aligned with his libertarian ideal of minimizing state control over the economy.
Growth Hacking and Aggressive Tactics
Under Thiel's leadership, PayPal employed aggressive growth strategies that often pushed ethical and legal boundaries. The company offered financial incentives for new users and referrals, promising $10 to every new PayPal user and another $10 for each referral. They also streamlined the sign-up process by neglecting to collect certain information required by banking regulations.
These tactics, which prioritized rapid growth over strict adherence to rules, would later become known as "growth hacking." While controversial at the time, such strategies have since become commonplace among Silicon Valley startups. Thiel's approach at PayPal essentially wrote the playbook for this aggressive style of business development.
The aggressive tactics employed by PayPal under Thiel's leadership drew parallels to the world of political campaigning, particularly the controversial strategies used in Barry Goldwater's 1964 presidential campaign. This blend of business and political thinking would become a hallmark of Thiel's approach throughout his career.
Post-PayPal Ventures
The Hedge Fund Era
In 2002, shortly after PayPal went public, Thiel unexpectedly stepped down from his role and sold his shares. With his newfound wealth, he embarked on his next venture: a hedge fund called Clarium Capital.
This move marked a significant shift in Thiel's public image. While he had always been a shrewd businessman, his involvement in PayPal had allowed him to maintain an image of an idealistic tech entrepreneur. With Clarium Capital, Thiel openly embraced the pursuit of wealth as his primary goal.
The change was reflected in his lifestyle as well. Thiel moved from a modest apartment to a luxurious mansion overlooking the Golden Gate Bridge. He also adopted a more "Wall Street" persona, engaging in the kind of social behavior he had previously disdained during his college years.
Clarium Capital quickly found success, largely due to Thiel's knack for making big bets on global economic events. One particularly successful bet was against the U.S. economy during the 2003 oil crisis, which resulted in the fund managing $260 million.
The Facebook Investment
While running Clarium Capital, Thiel also began quietly investing in tech companies. His most notable investment during this period was in a fledgling social network called Facebook, founded by Mark Zuckerberg.
Thiel became Facebook's first outside investor, attracted by the platform's rapid growth across college campuses. However, it wasn't just the business potential that drew Thiel to Facebook. He saw in Zuckerberg a reflection of his younger, provocateur self. Zuckerberg's earlier project, FaceMash, which allowed users to rate the attractiveness of female students, resonated with Thiel's contrarian sensibilities.
This investment would prove to be one of Thiel's most lucrative decisions, cementing his status as a savvy tech investor and further increasing his influence in Silicon Valley.
Palantir and the Shift to Surveillance
The War on Terror and Thiel's Response
In the aftermath of the September 11 attacks and the subsequent War on Terror, Thiel's political views took a more authoritarian turn. While many in Silicon Valley remained skeptical of the Bush administration's approach, Thiel became consumed with the idea that Islam posed a significant threat to Western civilization.
Thiel believed that the U.S. government wasn't being aggressive enough in its response to terrorism. He advocated for the use of "extralegal" methods and favored bypassing international institutions like the United Nations in favor of covert intelligence operations.
The Birth of Palantir
Driven by these concerns, Thiel founded Palantir Technologies in 2003. Named after the all-seeing orbs in J.R.R. Tolkien's "Lord of the Rings," Palantir was designed as a high-tech surveillance company. Its mission was to develop software that could help governments and corporations analyze vast amounts of data to identify potential threats.
The creation of Palantir marked a significant shift in Thiel's political philosophy. While PayPal had been founded on libertarian principles of bypassing government control, Palantir was explicitly designed to aid government surveillance efforts. This apparent contradiction reflected Thiel's evolving worldview, which increasingly prioritized security and control over individual privacy.
Controversy and Criticism
Palantir's activities soon drew controversy. In 2011, a group of hackers revealed that Palantir had been involved in attempts to discredit critics of the U.S. Chamber of Commerce and Bank of America. The company had allegedly tried to uncover damaging information about these critics with the intention of silencing them.
This revelation led to sharp criticism from journalists and privacy advocates. Pulitzer Prize-winning journalist Glenn Greenwald described Palantir as part of a "lawless and unrestrained axis... of government and corporate power." However, Thiel seemed unfazed by such criticism, viewing it as a confirmation of Palantir's effectiveness.
The controversy surrounding Palantir highlighted the tension between Thiel's professed libertarian ideals and his willingness to engage in activities that many viewed as authoritarian. It also underscored the growing power of tech companies in shaping public discourse and policy, a trend that Thiel himself had helped to accelerate.
The Trump Era
The Road to Trump Support
As the 2016 U.S. presidential election approached, Thiel found himself increasingly aligned with Donald Trump's political message. This alignment was not immediate; Thiel initially considered supporting other candidates, including former tech CEO Carly Fiorina and libertarian-leaning Ted Cruz.
However, Thiel eventually had what he described as a revelation. He recognized that Trump's message of economic nationalism and anti-immigration rhetoric resonated strongly with voters in the industrial Midwest who felt left behind by globalization. Despite the skepticism of the Republican establishment, Thiel believed Trump had a real chance of winning the presidency.
Reasons for Support
Thiel's support for Trump was driven by several factors. First, he saw Trump as a bulwark against what he perceived as excessive political correctness and liberal overreach. Trump's brash style and willingness to flout conventional political norms appealed to Thiel's contrarian nature.
Second, Thiel was drawn to Trump's anti-globalization stance. Having long been skeptical of the benefits of unfettered globalization, Thiel saw in Trump a leader who might reshape America's economic relationships with the rest of the world.
Third, there were personal financial considerations. Thiel believed that a Hillary Clinton presidency would likely lead to tax policies that would be costly for billionaires like himself. Trump, on the other hand, promised tax cuts that would benefit the wealthy.
Public Endorsement and Backlash
Thiel's support for Trump became public when he spoke at the 2016 Republican National Convention. His speech, in which he declared "It's time to rebuild America," marked him as one of the few high-profile figures from Silicon Valley to openly endorse Trump.
This endorsement was met with significant backlash in the tech community, where Trump was widely unpopular. However, Thiel seemed to relish his role as a contrarian, using the opportunity to highlight what he saw as the hypocrisy and groupthink of Silicon Valley's liberal elite.
The Transition Team
Following Trump's victory, Thiel was invited to join the presidential transition team. In this role, he was tasked with recommending candidates for various government positions, including the head of the Food and Drug Administration (FDA).
Thiel's recommendations often reflected his radical, anti-establishment views. For instance, he suggested appointing Balaji Srinivasan, a cryptocurrency entrepreneur who had advocated for abolishing the FDA entirely, to head that very agency. Such suggestions were often too extreme even for the Trump administration, highlighting the gap between Thiel's ideological positions and practical governance.
Silicon Valley's Hypocrisy Exposed
The Tech Summit
In December 2016, shortly after his election victory, Trump convened a meeting with the leaders of America's largest tech companies. The gathering included figures like Tim Cook of Apple, Sheryl Sandberg of Facebook, and Jeff Bezos of Amazon. Thiel, who had been instrumental in arranging the meeting, sat next to Trump.
This meeting exposed a significant disconnect between the public posturing and private actions of many tech leaders. Many of these CEOs had publicly supported Hillary Clinton and opposed Trump's policies during the campaign. Jeff Bezos, for instance, had joked about sending Trump to outer space.
The Shift in Tone
However, once in the room with the president-elect, none of these tech leaders challenged Trump on his controversial campaign rhetoric. Instead, they thanked him for the meeting and sought common ground on issues like trade with China.
This sudden shift in tone revealed a prioritization of business interests over the principles these leaders had espoused publicly. Rather than raising concerns about Trump's stance on immigration or climate change, they focused on areas where they could potentially benefit from his policies.
Facebook's Role
The complicity of tech companies in Trump's rise went beyond this meeting. Facebook, a company that Thiel had championed and invested in early, had played a significant role in spreading disinformation and conspiracy theories during the 2016 election campaign. The platform's algorithms had amplified divisive content, contributing to the polarized political climate that helped Trump win.
This revelation highlighted the unintended consequences of the tech industry's pursuit of engagement and growth at all costs. It also underscored the power that companies like Facebook had acquired to shape public discourse and, potentially, influence electoral outcomes.
Thiel's Vindication
For Thiel, the tech leaders' acquiescence to Trump represented a kind of vindication. He had long criticized what he saw as the hypocrisy of Silicon Valley's liberal elite, arguing that their professed values often took a backseat to their business interests.
The spectacle of these CEOs, who had positioned themselves as progressive thought leaders, now aligning themselves with Trump's agenda seemed to confirm Thiel's cynical view of Silicon Valley's political posturing. Once again, Thiel found himself in the position of the contrarian who had correctly anticipated the true motivations of his peers.
The Legacy of Peter Thiel
A Controversial Figure
Peter Thiel's career has been marked by controversy and contradiction. He's a libertarian who supported authoritarian measures, a tech entrepreneur who became skeptical of technological progress, and a Silicon Valley insider who often criticizes the industry that made him wealthy.
These contradictions have made Thiel a polarizing figure. To his supporters, he's a visionary thinker unafraid to challenge conventional wisdom. To his critics, he's a dangerous ideologue whose ideas and actions have had harmful consequences for society.
Influence on Silicon Valley
Regardless of one's opinion of Thiel, his influence on Silicon Valley is undeniable. His approach to business, characterized by aggressive growth strategies and a willingness to flout regulations, has become a template for many tech startups. The "move fast and break things" ethos that has defined much of Silicon Valley's recent history owes a significant debt to Thiel's example.
Moreover, Thiel's political activism has forced the tech industry to grapple with its role in broader societal issues. His support for Trump highlighted the tension between the industry's professed liberal values and its business interests, sparking important conversations about the responsibilities of tech companies in the political sphere.
Political Impact
In the political realm, Thiel's influence has been equally significant. His early support for Trump lent credibility to a candidate many in the tech world dismissed, and his involvement in the transition team gave him a direct line to shaping policy.
More broadly, Thiel's blend of libertarian economics, cultural conservatism, and techno-utopianism has helped shape a new strand of right-wing thought. His ideas have influenced a generation of conservative and libertarian thinkers, particularly those interested in the intersection of technology and politics.
The Future of Tech and Politics
As we look to the future, the questions raised by Thiel's career remain relevant. How should we balance innovation with regulation? What role should tech companies play in our political process? How can we harness the power of technology while mitigating its potential for harm?
Thiel's story serves as a cautionary tale about the unintended consequences of technological innovation and the dangers of unchecked power in the tech industry. At the same time, it's a testament to the transformative potential of bold ideas and the ability of individuals to shape the world around them.
Conclusion
"The Contrarian" offers a complex portrait of a man who has been at the center of some of the most significant technological and political developments of our time. Peter Thiel's journey from a chess-playing prodigy to a Silicon Valley power broker and political influencer is a story of ambition, contradiction, and relentless pursuit of a particular vision of the future.
Through Thiel's story, we gain insight into the forces that have shaped modern Silicon Valley and American politics. We see how the idealism of the early internet era gave way to a more cynical pursuit of growth and profit. We witness the blurring of lines between technology and politics, and the growing influence of tech billionaires on public policy.
Thiel's career serves as a mirror for our society, reflecting our hopes and fears about technology, our political divisions, and our ongoing struggle to define the role of business in our democracy. Whether one views Thiel as a visionary or a villain, his impact on our world is undeniable.
As we grapple with the challenges of the 21st century - from privacy concerns to political polarization to the ethical implications of artificial intelligence - the questions raised by Thiel's career will continue to be relevant. His story reminds us of the power of individuals to shape the world, for better or worse, and the responsibility that comes with that power.
In the end, "The Contrarian" is not just a biography of Peter Thiel, but a chronicle of our times. It's a story that forces us to confront difficult questions about the kind of future we want to build and the values we want to prioritize as we navigate the complex intersection of technology, business, and politics in the years to come.