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Peter Thiel: All Trends Are Overrated. Contrarians Build the Future.

By Peter Thiel · Strategy · 1 min read

I'm building a mobile platform for SaaS enterprises to do big data in the cloud. If you hear that many buzzwords — think fraud and run away. Buzzwords are a tell, like in poker, that the company is bluffing.

Key Points

All trends are overrated — if you hear 'Big Data, cloud computing,' run away
Buzzwords are a tell in poker that the company's bluffing and undifferentiated
Google was 'just another search engine.' Facebook was 'just another social network.' The categories obscured the innovation.

Buzzwords are a tell, like in poker, that the company's bluffing and that it's undifferentiated.

Think Fraud and Run Away

Thiel: I think all trends are overrated. Healthcare IT. Education software — somewhat overrated. SaaS software — pretty badly overrated. If you hear the words Big Data, cloud computing — you need to run away as fast as you possibly can. You need to just think fraud and run away.

If I said I'm building a mobile platform for SaaS enterprises to do big data in the cloud — a proliferation of buzzwords — these buzzwords are a tell, like in poker, that the company's bluffing and that it's undifferentiated. We've heard the buzzwords before.

Buzzwords are a tell in poker that the company's bluffing. Big Data, cloud computing — think fraud.

The Fourth Pet Food Company

Thiel: If you're the nth company in a category that's well established, that's problematic. You don't want to be the fourth online pet food company. Or the 10th thin-film solar panel company. Or the 10,000th restaurant in San Francisco.

The things that are underrated are the ones where there are no buzzwords. They don't fit into any pre-existing categories.

You don't want to be the fourth pet food company or the 10,000th restaurant in San Francisco.

Google Was 'Just Another Search Engine'

Thiel: Even the people running these companies describe them in terms of existing categories because it's so much easier. Google would have been described as a search engine in 1998. People would have said — why do we need another search engine? We already have 20. But the page rank algorithm was the key differentiating thing. If you simply labeled it as a search engine, that obscured all the key differences.

Or if you described Facebook as a social network circa 2004 — that's misleading. My friend Reed Hoffman started a company called SocialNet in 1997. They had social networking in the name. It was these avatars — you'd be a cat and I'd be a dog and we'd have weird interactions on the internet. People aren't interested in networking in the abstract. Real identity was the key innovation Facebook had.

Google was 'just another search engine.' Facebook was 'just another social network.' The categories hid the innovation.