Find Your Purpose (And 15 More Business Growth Tips from Peter Thiel)
Growing a business can be a complex endeavour. But Peter Thiel has some tips to grow your business and find your purpose.
You started a business and you’re ready to take off. But without a viable growth strategy, you may be dead in the water.
Planning for growth is essential for future-proofing your business. Nevertheless, many companies don’t build for growth.
Don’t get caught in stagnation. Build the right foundations from the start with tips from famous venture capitalist Peter Thiel. As one of the most successful venture capitalists in Silicon Valley, he’s seen it all.
Find out what he’s learned. And take your business to the next level.
Business Growth Tips from Peter Thiel
This billionaire investor and co-founder of PayPal knows what it takes to grow a business. He’s been an early investor many promising startups, including Facebook, Airbnb, SpaceX, and LinkedIn. Now his empire is worth $2.2 billion.
Find out what it takes to be a successful entrepreneur. Take a look at some of his tips below:
1 – Think About the Qualitative Nature of Your Business
Did you study the growth cycles of your industry before starting a business? It can give you a good idea of your business’ growth path.
For example, anyone with online software products can scale very quickly. And they have the opportunity to grow on a global scale.
On the other hand, businesses in service sectors like consulting scale linearly.
Some sectors have relatively short lifespans, including nightclubs and restaurants. Or they’re consumer dependent like gaming or the movie industry.
Figure out whether you want to be in a scalable or a competitive linear industry. They require different plans of action.
2 – Proprietary Technology for Monopolistic Advantage
Building proprietary technology is a great way to give you an advantage. However, it needs to be at least 10 times better than its closest substitute.
Think along the lines of Paypal’s online payment and Apple’s design. You don’t need to be the best all around. But you do need to be the best in one important dimension of the field.
3 – Think Big
Don’t be afraid to think big. A big vision and a plan to go with it can help with industry positioning.
Your approaches may be lean and agile. But methodologies aren’t a substitute for goals. And they can’t take you to the global maximum.
Mark Zuckerberg saw where his company could go. That’s why Facebook turned down an acquisition offer of $1 billion from Yahoo. The money was good, but nowhere near as good as the potential.
Steve Jobs took his long-term vision in a different way. He created a pipeline of products.
4 – Start with Small Networks and Scale Them
When it comes to networks, though, you need to start small first. Networks can be a powerful tool. But to be successful, you need to start with small networks and then scale up.
According to Thiel, plans begin at the micro-scale. You can’t benefit from macro-level insight without it.
So, where should your starting point be?
Technology should grow with scale and not only work at scale. In a perfect world, the potential for scaling is already in the original design.
Amazon started with books and then added similar products. Eventually, it scaled all the way.
Facebook worked in a similar way with only Harvard students. It eventually grew to include all students and scaled all the way to everyone in the world.
5 – Understand Venture Capital
Don’t underestimate the power of angel investors and venture capitalists. Many startups rely on them to launch and scale.
In most instances, investors with diverse portfolios simply won’t work. Growing companies need extra resources and attention. You may not want to work with investors who spread themselves too thin.
For instance, Thiel’s Founders Fund only focuses on a limited number of companies at a time. Why? The 5 to 7 companies need extra work so that they can be successful.
In addition, many top tech firms are all venture-backed. These same firms created 11% of all jobs in the U.S.
Venture-backed firms don’t just create jobs. Their revenues also contribute to 21% of the GDP. So, it’s in your best interest to find angel and venture capital for scaling your business. They understand what it takes to handle exponential growth.
6 – Have a Secret and Keep It Close
According to Thiel, there are two kinds of secrets: those about people and of nature. He goes on to say that every great business comes from a secret. One that’s hidden from the rest of the world.
This doesn’t mean skeletons in your closet. He’s actually referring to steady investment in innovation.
Identifying secrets and going after them can keep your business ahead of the competition.
7 – Focus on Balancing Foundations
Foundations are important. So as a founder, you have to make sure that it isn’t flawed. This means balancing the 3 aspects of foundation:
- Ownership
- Possession
- Control
The key is to find just the right balance in pay details like perks, cash, and equity. You also need to balance the size and composition of your board of directors.
8 – Create a Solid Culture
Wonder what culture has to do with growth? Culture can affect a business’ innovation.
You need a balance of creativity and best practices. It helps to keep the business innovative. That balance also helps you reap the benefits of innovation and continue to do so.
Companies that endure are about more than pay and perks. They have a culture of excitement. And that excitement keeps innovation moving.
When you have a startup on a mission, good culture is simply what it looks like on the inside, according to Thiel.
PayPal’s founders had strong ties inside and outside the workplace. It went beyond professionalism to the point that they supported each other long after they sold the company.
9 – Become a Master at Marketing and Sales
You also have to be a master at marketing and sales. It’s about creating impressions and attachments. You want to cultivate long-term relationships with customers.
It may be worse for techies, though. Many don’t have a deep enough understanding of the interconnectedness of sales and marketing. And sometimes they vary in the B2C and B2B sectors, too.
However, at some point, you’re going to have to sell. Even if it isn’t part of your sector.
You need a clear public relations strategy. After all, like Thiel says, “selling your company to the media is a necessary part of selling it to everyone else.”
10 – Don’t Forget About Branding
What do people think when they see your brand? Branding is a very powerful tool. It goes hand in hand with building a successful company.
One of the best examples of successful branding is Apple’s sleek design. Combined with their branded stores and catchy ads, you can’t help but notice them.
11 – Use Computers as Tools, Not Replacements
Analytics automation and Big Data might be fashionable to talk about. But remember that computers should complement and not replace human effort.
Computers are great when they complement your goals. But don’t let it replace the human element completely.
PayPal created many solutions that use a hybrid of computer technology and human professionals. For example, they dealt with payment fraud by using both algorithms and financial experts.
With Thiel’s current startup, Palantir, he uses trained analysts along with digital intelligence tools. Furthermore, LinkedIn doesn’t try to replace recruiters. They merely give them valuable profiling tools to help with the process.
12 – Balance Research and Intuition When Making Decisions
Do you want to grow an early-stage startup quickly? The key is effective decision-making.
However, it’s a mistake to rely strictly on data or your gut feeling. You need to balance the two.
Research data may plainly point toward a problem. But you also need to go beyond the numbers.
What does your intuition tell you to do? Could it be a viable solution?
For example, Thiel explains that he had growth with his initial B2C cross-border bill pay product. But it wasn’t growing as fast as he wanted it to.
Research showed where the problem was, but the solution came from intuition. They came up with a win-win solution for both banks and consumers in the form of B2B banking APIs.
13 – Find Out Exactly What Isn’t Working and Why
You may know that something isn’t working correctly. But knowing isn’t enough. You need to delve deeper.
Find out why something isn’t working. Don’t be afraid to get to the root cause of the problem. You may find that the actual problem is deeper than you originally thought. But, instead of applying temporary solutions, addressing it can help your company move forward.
Like an illness, you want to address the underlying causes. Don’t get caught up in the symptoms.
Thiel saw this with his B2C product. It was bringing on users, but it wasn’t growing the way that it should.
A deeper look informed the company that it had two sources of slowed growth. However, they couldn’t exist together so something needed to change.
14 – Don’t Be Afraid to Kill Off Ideas You Love
Sometimes ideas that you’re partial to just don’t work. And sometimes they can hold you back from growing.
Thiel realised this about his previous company’s original product. The B2C cross-border bill pay and gift cards were the company’s first idea. He loved it, but he made the tough decision to kill it off to continue growing.
This tough decision paved the way for Arcus. But the company may not have come to this second iteration if it wasn’t ready to kill off the first iteration.
15 – Address Tough Day-to-Day Questions
You may feel like you’re pulled in different directions when it comes to focus. Especially in the early stages of a company.
But if something bad happens you may feel tempted to place blame somewhere else. If you get in front of your problems, though, you may not run into these situations as often.
Be willing to ask tough day-to-day questions that aren’t asked or addressed. You want to grow every day. However, avoiding tough questions may be slowing your growth.
The Takeaway
Peter Thiel knows his way around business. As a co-founder of PayPal and a successful venture capitalist, he knows the ins and outs of business growth.
So it probably doesn’t surprise you that he has many valuable tips to share with entrepreneurs.
Think about how you can implement his advice into your own strategies. Business growth may be tricky. But following Thiel’s advice may help you avoid many pitfalls and pave the way for faster growth.
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