So here we are at day 3 of the Gartner Symposium Itxpo. I have been blogging some of the highlights and insights gained throughout the show. The first post in the series covered the overarching themes of the show as expressed in the opening keynote. The second post took a look at the different, but both very good keynotes from Satya Nadella (CEO of Microsoft) and Steve Wozniak (Co-founder of Apple). Today’s keynote was with Peter Thiel, who is a noted venture capitalist and was the co-founder and former CEO of PayPal. Peter continued the trend of engaging and informative keynotes at this year’s show. He sat down for a Q&A with a Gartner analysts and talked in good detail on his thoughts on what makes a good investment, thoughts on education (for which he is well known for his opinions), overhyped trends and what it takes for bigger companies to innovate.
When Peter Thiel co-founded, he thought of PayPal potentially as an alternate currency. He and the rest of the team quickly learned that it was hard to create a new currency, existing currencies work pretty well. They then decided to focus on a narrow sub market with a strong value proposition, and they chose eBay power sellers with a proposition of a better and faster way to collect money from their buyers. That insight is something he expressed in his keynote that companies today should take to heart. When looking to innovate something new, companies should not look to replace something that already works well, they should look to do things that are orders of magnitude better than what is out there. That is what he looks for today in his investments. He is also not sure if big companies should experiment on multiple things which is often what you see, or at least if they do they should have the right mindset. Too often people look at multiple experiments as gambles, and when you do that you are already expecting to lose. Instead only do things you have a strong conviction in. If you have a short list of things that you have a strong conviction for, you can get things done.
Can big companies move the dial? Peter said this can be hard. He mentioned too many big companies stop innovating because they get so big. He mentioned he is skeptical of Apple Pay because of how big Apple is, but Apple has done it before. When Steve Jobs came back to Apple, Apple at that time was still a very big company. He led a substantive shift away from computers to consumer electronics, he had the conviction and the plan to do so. Substance over process matters, and too many companies spend too much time on process and not on substance.
One thing he said is underserved today is vertical integration, or complex coordination around a well-defined plan. That is another thing he looks for when funding new projects and is another area big companies can differentiate. Peter said that complex coordination is not done well in our society. What did Tesla do that was new when they introduced their electronic automobile? Most of the components they used already existed. It was the coordination of putting things together that already existed better than everyone else. Same for Apple and the iPhone, they did not invent the phone, but they put components together better (or orders of magnitude better) than everyone else.
What are some of the cautions when investing? Stay away from trends. Peter is always skeptical of anything that can be described as a trend. Big Data, Cloud, Internet-of-Things (IoT), etc… It is not that there is merit within the trend, but as he said: “Hyped trends prevent people from thinking clearly on what it is they are trying to deliver”. Instead look at the specific use cases that are narrowly defined and can be differentiated. That is where he looks, and where companies should look when evaluating where to innovate and invest.
Another good conversation and keynote. Definitely food for thought as companies and individuals evaluate areas to innovate. When Peter was asked what areas still have room for innovation, he commented that there still is potential for innovation in plenty of areas, and a couple of areas that come to mind with potential are cybersecurity and mobile integration. That makes sense to me, and if you look at the technologies and products that Citrix is innovating in, they match these areas quite well.
If you are at Gartner ITxpo this week, make sure you stop by the Citrix booth and see what we’ve been up to.
Chris Witeck is a Principal Technology Strategist with Citrix Labs. Citrix Labs is an applied research organization within Citrix. To get updates on what the Citrix Labs team is following as well as projects the Labs team is working on, you can subscribe to the Citrix Labs LinkedIn group