AUCKLAND, NEW ZEALAND – Peter Thiel is the first outside investor in Facebook, the guy who sold PayPal to eBay for billions, and a Founders Fund partner.He told today’s Ice Ideas conference audience that there is one question he asks entrepreneur looking to begin a startup.
He asks: Why will employee number 20 join your company?
Thiel says it’s easy to figure out why someone wants to be a CEO or another very early employee in a startup; they’d like to run a company and get rich doing it.
He says its also easy to know why employee number 1,000 joins; the company is clearly on its way to growing into something huge, and will provide a nice, stable living.
Employee number 20, he says, will have to join for different reasons.
By then, the big equity stakes will have already been handed out.
Also, a company with only 19 employees won’t have “made it” yet; it won’t be a place someone looking for a stable income will join.
So what’s the right answer?
According to Thiel: for the only companies worth starting – perhaps the only companies he’d invest in – the right answer is that employee number 20 will join because you are doing something nobody else has done – “something fundamentally new, fundamentally different.”