In the five-minute audio excerpt below, Thiel talks about the competition between Google and Facebook — some of which, he says, is driven by trying to be perceived as the coolest company in Silicon Valley, where there is “super-intense competition for talent.” He also discusses how internal politics can tilt decision-making in large companies towards “safe” ideas and away from what is truly disruptive.

Additional Highlights

“Why do you have startups at all? We have all these large existing companies with more resources, it’s a safer place to work, they can have longer time horizons. I think the reason is that the internal politics in large organizations get strangely dysfunctional. It’s critical to have original, new ideas. But in a large organization, the ideas that get funded are ones that are conventional. ‘Everyone knows this is a good idea, therefore we will do it.‘“You end up with things that are strangely banal. And the things that everyone thinks don’t make sense — some subset of those are the ones that are going to work really well. There is this systematic political challenge that you have in big organizations that people try to come up with all sorts of ways to overcome, but it tends to be very endemic.”

“Once you’re in a big company, the only things that move the dial are big things. If the great new markets to start in are small markets [with potential to grow fast, and fewer players entering them], one of the mistakes big companies will tend to make will be to go after big things.”