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Peter Thiel: There Is No Wisdom of Crowds

By Peter Thiel · Leadership · 2 min read

Crowds don't think independently. They copy each other. That's why the best founders seem slightly autistic.

Key Points

Crowd wisdom only works when people think independently — which never happens
Social pressure kills original ideas before they form
Harvard Business School students perfectly time bubbles by copying each other

Why is it that people who are not suffering from Asperger's are at a disadvantage? Because they get talked out of their original ideas before they're fully formed.

The Marble Jar Illusion

The wisdom of crowds has a dirty secret. It only works when everyone thinks independently. Put a jar of marbles in front of a hundred people. Ask each to guess the count without talking to anyone. The average will be shockingly accurate.

But that never happens in real life. People watch each other. They copy. They conform. The moment you look sideways to see what your neighbor wrote down, the wisdom evaporates.

"When you have a crowd dynamic where people draw conclusions by looking at one another — that's where the crowd becomes untruth."

Why Founders With Asperger's Win

Thiel noticed something strange in Silicon Valley. A disproportionate number of successful founders seem to have mild Asperger's. Most people see this as a disadvantage.

Thiel flips it. The real question: why are neurotypical people at a disadvantage? Because they pick up on every social cue. Every raised eyebrow. Every "that's a little weird" reaction. They get talked out of original ideas before those ideas are fully formed.

"You pick up on all these subtle cues — oh, that's too strange, that's too weird — and you go open a restaurant instead."

The Harvard Business School Herd

Thiel calls MBA students the "anti-Asperger's demographic." Hyper-socialized. Great at reading rooms. Terrible at independent conviction.

Harvard did a study. The largest cohort of graduating students always piled into the same hot sector. In 1989, they all wanted to work for Michael Milken — one year before he went to jail. In 1999-2000, they timed the dot-com bubble perfectly. By arriving at the top.

"Put all these people in a hothouse environment for a few years and they look to one another to figure out what to do. It's not clear that process gets you the right answer."

Nobody Is Immune

Thiel isn't just picking on business school kids. Everyone is subject to this. Even you reading this right now.

His proof: advertising. We all think ads work on other people. Stupid people. The disturbing answer is that advertising works on all of us, far more than it should.

"We always think — who are all these stupid people who watch TV ads? The disturbing answer is that it's all of us."