“The three most controversial disruption opportunities in the tech world today are sex, cannabis and bitcoin and entrepreneurs are flocking more to the last two than they are the first. When you talk about the fact that courage is in much shorter supply than genius, it’s in particularly short supply when it comes to sex tech. I’m curious- given everything you’ve written and talked about, what’s your personal view of sex tech? Do you find it as untouchable as the rest of the tech-world does?”
This is the first question for Peter Thiel, speaking about disruption at a General Assembly gig in New York (30:33). Peter Thiel founded a range of companies including PayPal, he’s a notorious investor and he’s written a business book called Zero to One. He famously loves asking interview candidates this question-
“tell me something that’s true that nobody agrees with”.
This is a great question to ask, both as an investor and a marketer.
Investing (particularly applied to value investing) :
The game of investing is about identifying undervalued businesses. You want bargains. You buy for less than intrinsic business value and sell when that value is realised by the market. To do this you need an edge in information or analysis because most people playing the game are also looking for undervalued businesses. As good businesses are identified and that information spreads, people buy, the price goes up, the bargain status is lost. So in order to really win the investment game, you don’t want to know what everyone else knows to be true- you need to know something that is true that no one else knows. This type of critical analysis is ‘second thinking’, I recommend reading The Most Important Thing for more on that.
Marketing (word of mouth) :
Every marketer knows the best kind of marketing is word of mouth. It’s free with trust ready-built into it. Cognitive psychologists theorise word-of-mouth occurs due to the disruption of mental models. The brain stores information in mental models: bundles of schemas/information around categories- 'the sky is blue, clouds are in the sky, when the sky is grey it is likely to rain' etc. This helps us quickly sort, identify and react to the world around us without having to think about every single little detail, that would be exhausting. Only when an existing mental model is disrupted with new or contrary information will our attention be fully drawn. Or as Seth Godin calls it - finding the ‘Purple Cow’. In other words, in order for people to talk about something, you need to present them a new truth about that category. Read more about word of mouth marketing and schemas here.
Back to the video.
Cindy Gallop is asking Peter this question. She is a sextech entrepreneur. She runs a business that distributes adult content on a website called 'Make Love not Porn'. Reading between (and directly at) the lines, she is saying to Peter: “I think that sex tech is worth exploring as an entrepreneur, but most people don’t - what do you think?"
Peter responds :
“wow you’re putting me on the spot here!”
(an intriguing start considering this is a question about disruptive industries after he’s just given a talk on disruptive industries)
“um.. you know.. um.. I’m tempting to say something like, there’s probably um.. there’s probably um.. more that I should be thinking about in your question than I am since my initial reaction is to be somewhat uncomfortable answering your question, so, that’s.. that’s.. probably pretty good as a general answer”
He then babbles on a bit about how ‘vice industries’ attract naughty sorts, he knows this because this one time at band camp this one adult site he was interested in did an illegal payment thing. See, they're all up to no good. Oh and also he is interested in industries that look like they’re becoming deregulated.. like marijuana.. even though, you know, the question wasn’t about that.. he then rightly ends by saying “I’ve sort of avoided your question”
So there you go. Now when you’re discussing Zero to One with friends and you’re debating that old 'truths that no one knows’ questions you can point them to here and hat tip Cindy Gallop.