The Peter Thiel Question Every Founder Needs to Answer
Why this one question is the most important question for you to answer
I was talking with a founder recently who was frustrated. Lots of problems were surfacing: Growth had stalled. The team kept flip-flopping on strategy. Every time a customer complained, the product was tweaks a little more to fit them.
I asked them one of my favorite questions, which is taken from Peter Thiel seminal book Zero to One. The question:
“What do you believe about your product or industry that most smart people don’t?”
Theil’s thesis is that competition is for losers. If you’re competing on the same thing as everyone else, the only thing left to compete on is price which is a race to the bottom. The way out is to be genuinely different. If you can’t be different, if you can’t say out loud what you believe that other smart people don’t, you’re in trouble. But, if you CAN answer this, it solve a lot of other problems.
No differentiation, no pricing power
If you can’t say what you believe that the smart people in your industry don’t, you probably don’t have a real point of view. And without a point of view, you can’t stand for anything. You end up trying to please everyone — expanding the product to catch every complaint, softening your policies so nobody’s upset, chasing whatever the loudest customer said last week.
No point of view, no PMF
Product-market fit isn’t just “people will pay for this.” It’s “people will pay for this specifically because it’s not like the other things.” and also if you take it away from them, they’ll screen (i.e. they LOVE you). If your pitch is a slightly-better version of what everyone else does, you’re not finding fit. Sure customers will use you because you’re fine, but they’re likely not going fight for you.
The founders who nail PMF usually have an opinionated answer to the Thiel question. They believe something true that the market hasn’t caught up to yet.
If you want to be game-changing, you have to do something no one’s done
Most founders want to build something big, but they also often hedge and try to build something safe. They look at proven playbooks, proven pricing, proven positioning. You can’t do both. Every category-defining company did something that looked irrational at the time, because the founder saw something the rest of the smart people hadn’t figured out yet.
It’s a discipline. You have to actually believe something contrarian, be willing to be wrong about it, and build the company around it anyway.
It also helps you recruit A-Players
A clear and compelling belief doesn’t just attract customers. It attracts people. As a startup its tough to compete with the big companies. They can pay more, offer more benefits and the ability to work with the best and brightest. What do you have?
You must have a great and differentiated mission. Why? Because the best teams aren’t hired, they’re self-selected. When you say what you actually believe - especially if it’s a little contrarian - you pull in those who are also believers.
Vague companies get vague candidates. People who need the job, not people who believe the mission. But a company with a real point of view starts to look a little like a cult, in the best sense. People join because they want to be part of building something unique, something special. You couldn’t pay your best hires enough to work at a boring company. But great people will flock to a belief worth fighting for, and often take a pay cut to be early.
So, what do you believe?
If you can’t answer the Thiel question easily, that’s likely your real problem, not your funnel, not your churn, not your team. Sit down and write it.
If you can’t come up with one, this is now your top priority. Everything else (pricing, positioning, product, recruiting, growth) gets easier once you know what you believe.