War and Peace

1. War Without: Theater and Psychology

Wars are everywhere — real ones, and metaphorical ones like the war on cancer or the War on Terror — and the language of war maps directly onto startups. This class asks when fighting is actually justified, and how to tilt energy away from destruction toward building something productive.

• Cold War rivalry played out as proxy theater: the Fischer–Spassky chess match (1972) and the Miracle on Ice hockey upset (1980).
• The space race ended not with a bang but with the Apollo–Soyuz handshake in orbit (1975).
• Decades of intense tension stayed largely symbolic — proof that rivalry can motivate without destroying, though the line between the two is dangerously thin.

The psychological price is steep: fixate on an enemy long enough and you lose sight of everything else. The skinny kid who obsesses over the bully grows up to become one himself.

The battles are so fierce because the stakes are so small. — Henry Kissinger, on academia

2. Marx vs. Shakespeare

Hamlet pushes the standard to its extreme: greatness means finding quarrel in a straw when honor is at stake — true heroes fight over things that do not matter. Thiel's warning is that this is madness as much as greatness, and founders should not romanticize it.

You must choose your enemies well, since you'll soon become just like them.

3. A Short History of Tech Wars

In the 1970s, NCR, Control Data, and Honeywell all built similar machines to fight IBM — and every one of them missed the microcomputer wave. In the dot-com era, Pets.com, PetStore.com, and Petopia battled over an online pet-supply market that was never viable, while Kozmo, Webvan, and UrbanFetch repeated the pattern in delivery. Inside each war the narrative felt urgent; from outside, the combatants were interchangeable and the prize was worthless.

1. 1

   Oracle vs. Siebel

   Siebel's founder was a top Oracle salesman, and his company mirrored Oracle from day one. After years of stunts — Oracle once parked a recruiting truck outside Siebel's headquarters — Oracle simply acquired Siebel in 2005. When a war ends in acquisition, the fighting was probably pointless all along.

2. 2

   Informix vs. Oracle

   A 1990s billboard war — signs like 'You just passed Redwood Shores. So did we.' — targeted rival employees, not customers: pure motivational theater. Informix imploded in 1997. Larry Ellison's playbook: always keep an enemy big enough to motivate you but too weak to threaten you.

3. 3

   The card-reader shape war

   Square's little white square spawned PayPal's triangle reader and Intuit's cylinder — imitators literally running out of shapes. Thiel's verdict: the copycats are in serious trouble; it is much better to be original.

Microsoft and Google spent over a decade converging — Bing vs. Search, Chrome vs. Explorer, Docs vs. Office. While they fought, Apple rose above the battlefield: by 2012 its $531 billion market cap exceeded the $456 billion of Microsoft and Google combined. Fighting is costly; those who avoid it can swoop in and capitalize on the peace.

4. If You Can't Beat Them, Merge: PayPal vs. X.com

In late 1999, PayPal and X.com sat four blocks apart on University Avenue in Palo Alto, matching each other feature for feature and signup bonus for signup bonus. Engineers worked 90–100 hour weeks; one sleep-deprived engineer even presented an actual bomb design in a meeting. The focus was never on building something objectively useful — it was on beating X.com.

Both leaderships were scared enough to talk. In February 2000 they agreed to a 50-50 merger on neutral ground, and the combined company raised capital just before the market crashed — peace bought years of runway to actually build the business.

• Avoid wars whenever you can — most are not worth fighting.
• If you can't win, run away or merge.
• If you must fight, strike fast with overwhelming force and end it — the longer a war drags on, the more you become indistinguishable from your enemy.

5. War Within: Infighting as an Autoimmune Disease

Most companies are killed by internal infighting... It's like an autoimmune disease.

Internal fights are Shakespearean too. The Marx story — people clashing over deep disagreements about direction — is rare; in practice people fight because they want the same role or turf. In well-functioning companies, people who want different things simply go own those different things. At PayPal, David Sacks's mandate to build one seamless product overlapped with everyone else's job — exactly the kind of conflict a CEO must defuse before it escalates.

• PayPal redrew its org chart every three months to defuse conflicts before they formed.
• Every person was evaluated on exactly one thing.
• Each person's mandate was completely different from everyone else's — focusing on an internal rival is almost always the wrong move.

6. Conversation with Reid Hoffman

Competition hurts on every front at once — customers, hiring, financing. Hoffman's founding test is to be 'contrarian and right': if the consensus dismisses your idea, you get room to grow before rivals arrive. But never count on rationality — people will compete with you even when doing so is a bad idea.

• A marginal edge is worthless: you need something 10x better that fits in one sentence. One startup needed a 30-minute pitch to differentiate its anti-spam product — fatal.
• 'Google can do it' is a weak objection unless you're building a search engine: big companies have limited focus, not limited smart people.
• Hoffman's interview question — how would you split $100k between iOS and Android? — has exactly one wrong answer: 50-50, which means you have no view.
• Few companies have plans; fewer have secret plans (Mozilla, Quora, Dropbox). Even a bad plan beats no plan — stacking resume lines to 'keep options open' is not a strategy.

PayPal beat eBay's in-house Billpoint by seeing that the real platform was email, not the eBay site — PayPal's notifications often reached auction winners before eBay's own did. The lesson: keep questioning which battle you are actually in; in battle, only the paranoid survive. On geography, Hoffman calls New York the second most interesting consumer-internet hub, but Silicon Valley's network effects and single-minded focus on tech make it unlikely to be displaced.

A half hour pitch on anti-spam is just more spam.

Then vs. now (2026)

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