Competition is for Losers

Posted by dbhalling 10 years ago to Business
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Peter Thiel interview video.

One of Peter Thiel’s interview questions is tell me something you know to be true that no one else knows is true? How would you answer that question?

My answer is that the source of real per capita growth is inventions and patents, property rights in inventions, are the key to stimulating people to invent, resulting in the Industrial Revolution and our present standard of living.
SOURCE URL: http://hallingblog.com/competition-is-for-losers/


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  • Posted by UncommonSense 10 years ago
    FYI. John D. Rockefeller Sr. said that competition was a sin.

    I totally concur with your bottom line. What's interesting is that according to what you said, in order for that to happen, the gubbermeant would have to get out of the way.
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    • Posted by 10 years ago
      It's easy to be talking with people at cross purposes on this issue. The economic concept of Perfect Competition is wrong, it is not capitalism, and it does not create wealth. Wealth is created by creating new technologies. What we really want people competing on is creating new inventions.
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    • Posted by 10 years ago
      Yes. It is not that competition should not be allowed, it is that me-too products do not really move us forward. Think of the Model-T. If we focused on competition we would still be driving Model-Ts
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      • Posted by JanelleFila 10 years ago
        So, so agree! Well said!

        What I know to be true, I'm learning a lot of people also know to be true. People like Ayn Rand and all of you here in this forum. Just because I am surrounded by people who don't understand my less than liberal viewpoints :) doesn't mean that I am alone or the minority! I am so grateful for have found this community. Thanks everyone for sharing! I am truly learning a lot!!!
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      • Posted by $ Susanne 10 years ago
        For it's day - when it went to the drawing board in 1905 using then proven technology and some new innovations (and entered production 3 1/2 years later) the T was somewhat of a cutting edge car, but even then it was somewhat dated, and were it not for its reliability and low cost of production, would have went by the wayside in the early 1920's. That it held on until 1927 was a sign of how strong a hold Henry had on His company... and he went, kicking and screaming, to the "modern" Model A (Still relatively conservative compared to the competition).

        After all, driving a 35 MPH wheezy, breezy underpowered and undergeared farm buggy when everyone else was motoring along at an easy 50 with good springs, 3 speeds forward, relative comfort (and even automatic windshield wipers and - gasp - heaters!!), and - goodness forbid - a car that didn't boil over or run out of gas going up a hill was getting to be a little old.

        Even then - a number of T's were still family transportation into WW2, and to this day there are still over 40,000 of the things up and running (including mine that turns 99 in 6 weeks) - a testament to how well built and overengineered they were.
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        • Posted by plusaf 10 years ago
          Susanne, speaking as an engineer, I might ask if the T's were 'overengineered' or 'under-cost-reduced."

          I put something like 170k miles on a '67 Pontiac Tempest before it rusted out under me. Replaced it with it's apparent successor, a '77 Pontiac Ventura. Real machine screws had been replaced by stamped flat metal 'speed nuts' and it took me about three years to cure a designed-in engine-stall 'feature.'

          Many product improvements come from customer desires for better reliability, performance and ease of use.

          I occasionally point out how 'simple' the early cars were, but people weren't too quick to reject the advent of the electric starter, too... :)
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      • Posted by CTYankee 10 years ago
        ROFL I read that as "Think of T-Mobile..." and how Deutsch-Telecom is trying so hard but is failing because there is an ever-present and unspoken 'European Mindset' that is holding them back here.
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  • Posted by Herb7734 10 years ago
    Yes, but improving an existing technology can also be profitable. Example: Samsung.
    Answer to the question: A little bit of the right kind of knowledge can defeat any progressive argument. A little bit of Aristotle goes a long way.
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  • Posted by 10 years ago
    "Thiel is often associated with extremist, Ayn Rand-style libertarianism—for instance, he’s building a government-free island—but he is also writing in the tradition of American idealism: There’s the belief in progress, the insistence on meaningful labor, and the valorization of the critically minded, pioneering individual" New Republic.
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  • Posted by plusaf 10 years ago
    My comment when posting to FB...

    "Definitely worth watching and learning from...
    I once bragged to a friend that my new (VERY early version of a) laptop computer "could run tens of thousands of DOS applications already!" [way pre-windows...] and his response was simply, "So many? That means that none of them are any good."

    That's why there are a lot of downloadable apps today and nowhere near as many automobile manufacturers.
    Think about it."
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  • Posted by $ jbrenner 10 years ago
    If I told you something I knew to be true that no one else knows is true, then I wouldn't be the only one who knew it anymore. Would I still be able to then capitalize on that knowledge? Perhaps so if you were my patent attorney.
    Otherwise, I am better off keeping it a trade secret.
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    • Posted by khalling 10 years ago
      lol I think the point Thiel is making is you can be completely right on and state it straight up and people still won't believe you. I think this is part of why inventors always get that bad rap of being crazy. ie the Professor in Back to the Future or say Armstrong or Tesla. History happens and we look back and say wow-that guy didn't get the credit in his life time he should have or what a visionary.
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      • Posted by $ jbrenner 10 years ago
        So true, khalling. Einstein was right when he said that genius borders on insanity. That statement applies to me as well.
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        • Posted by IndianaGary 10 years ago
          Uh, I'm confused. Did you mean the genius part or the insanity part?
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          • Posted by $ jbrenner 10 years ago
            I was tested at 140 on the IQ test as a kid. That means that I was borderline genius. I am probably not borderline genius anymore. As for the insanity, sometimes that seems accurate.
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            • Posted by 10 years ago
              I do not think genius and insanity are close to each other. I do think that being a genius can drive you crazy because people do not see think that are clear to you (in a free country) or people do not recognize something brilliant you have done and praise mediocre people - see Barack Obama and Paul Krugman.
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              • Posted by $ jbrenner 10 years ago
                What drives me crazy is what is obvious is being denied, and what is being promulgated as truth or fact is so easily debunked. (Ex. the 9/11/12 Benghazi explanation by Susan Rice)
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  • Posted by Temlakos 10 years ago
    Absolutely.

    So the judiciary must protect intellectual property.

    And the executive must NOT protect "market share" or anything else certain toadying "businessman" demand from the government.
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  • Posted by JCLanier 10 years ago
    How would I answer the question...?
    I wouldn't.
    Unless secured by all possible global patent rights, etc.
    In the course of years, I have run into copyright disputes and registered name disputes even though scrupulously executed by (European) attorneys... usually leading to some form of settlement agreement just to be able to stop the attorney fees and get back to work.

    Even if you follow all requirements and lock down every possible avenue (which has its costs) you still need to have the financial ability to defend your invention at any moment it has been infringed upon. If you opt to manufacture in China- forget it, you just lost all sanctity!
    We cannot ignore that inventions, like so many things, are global affairs. You have to be able to navigate a global system to be able to really protect your intellectual property/invention.
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    • Posted by 10 years ago
      I think his point is that people often will not believe you even when you tell them. For instance, if you told people you could make a LASER before one was invented, they would not believe it was possible or if possible was just too hard and 'you' could not do that
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    • Posted by khalling 10 years ago
      Completely true. and through reforms, inventors must disclose their invention before they even take title to it, allowing other countries to steal your technology LONG before they even get a patent. It means that lots of inventors keep trade secrets. The problem with trade secrets is that it does not disseminate technology. One argument against patents is this exact thing. But actually patents are great for getting technology moving. He's got a patent on something you want but you don't want to license? Ok-make something else that will work and so on. Patents move and expand markets, not hold them hostage.
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  • Posted by $ Thoritsu 10 years ago
    Great theme.

    The only note I would make is that great execution teams provide similar value to IP, and cannot be ignored. What Deming did to manufacturing is in the same order of magnitude of wealth creation as technology, and should not be lost in the simplicity of this argument. If you don't believe this, drive an Italian or French car for a while.
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