Compete to win. If you lose consider creating a new game.

A student in Peter Thiel’s class on start-ups blogged notes of one of the lectures, which led to a NYT article, which led to a blog post by a colleague. The general argument being put forth is that intense competition leads to competition-for-the-sake-of-competition, instead of leading to innovation.

There are many things mixed up in this piece, among them the poorly thought-through notion that war and sports are the same type of competition. First, I need to comment on why this is just not-quite-right. Playing games is an infinite endeavor. If you lose, you try again, the competition changes, you hope to win sometime. If you can’t win, you can try to change the rules of the game. You may not succeed in doing so, the rules may be set in stone. But in that case, you can find a new game to play. And if there isn’t another game you like, you can always create your own. Consider American Football, or the more recent invention of Frisbee Golf.  Or how could I forget, Quidditch.

War, however, is not the same. War involves ultimate termination, permanent occupation, subjugation. In historical terms, it often involves the outright exploitation of the weak and disempowered (in real war, women get raped, children murdered). War is not, generally speaking, an infinite endeavor. Nor is it one that enables restarts, do-overs, learning development or growth, and certainly not creation of any kind. War is destructive—and it destroys absolutely.

The other thing Thiel mixes up in all this is that he sort of suggests that competition does not drive innovation when he says maybe “competition isn’t as good as we’re told it is.” I think that’s wrong, competition is every bit as good as we’re told it is. Take Thiel’s own example—one could argue that losing a competition is the thing that prompted a creative spark. Without competition, he would not have experienced loss (of not getting the clerkship), and he would not have been forced to go through a coping process, through which he wound up starting PayPal. Any seasoned athlete knows why competition in games is a great metaphor for life: “the great accomplishment is not in never failing, but in rising again after you fall.” Thiel got back up when he lost. He just decided the next time to play a different game.

There is an implicit idea in all this that somehow, by “opting out” of competition for a legal clerkship, Thiel found his creative spark and stopped competing—but this is an absolutely absurd notion. Did he not compete when he started PayPal? Of course he did. In some sense, he entered an even more competitive endeavor. And he is still competing—today in the early-stage investment space. At some point, though, Thiel will decide he is done competing. He will become, as all athletes eventually do, a spectator. That point would have occurred at some point even had he done a a clerkship, and it will occur for all of us. It is part of being human.

All of which is a long way of making just two points: (1) I think the war analogy is a bad one—for work and for life—I much prefer we think in games; and, (2) I do think competition is the thing that spurs creativity, and in many cases losing itself can be the thing that ignites a creative spark to create a whole new game.

As a small tangent, a few months ago one of my oldest friends and I went back to our high school to talk to the PTSA about success. Ironically, we both talked an awful lot more about failure. The evening largely focused on how important it is that students experience failure in high school, and the parents were nodding right along with us the entire time. We need to compete, but just as importantly we need to fail.

So, on a related note, there is one final point to make on this Thiel piece. Brooks ends his NYT column thus: “Everybody worries about American competitiveness. That may be the wrong problem. The future of the country will probably be determined by how well Americans can succeed at being monopolists.”  This strikes me as unnecessary and slightly inaccurate simplification.

If I am right that competition in games is a good thing that drives creativity and innovation, then what do we need to focus on? Here I think the Thiel example teaches us two things, which many of us intuitively know: tolerance for failure and openness to new ideas are the necessary preconditions for innovation. Without those preconditions, you can’t easily decide to stop playing the game you’re losing and create a new one.


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  1. Pingback: Thiel redux | Nicklas Noterar

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