That’s an interesting piece of advice for anyone who has been part of a founding team. This advice seems counterintuitive because the key processes involved in building something new – including ideation, iteration, launch and optimization – are not engineered to bring a monopoly into being. Each of these processes are designed to achieve incremental goals, not to mechanistically bring about a new monopoly. Even the ideation phase is usually approached experimentally. Try this, see if it works. If not, try that. So the perspective Thiel recommends to investors may seem a bit alien to entrepreneurs.
But that doesn’t mean Thiel is wrong. To see why, think about the creative process this way. If your product is so good that no one can provide a close substitute, you’ve done something very right. You’ve created something that serves desires and needs in your customers that your potential competitors just don’t grok. Your product is akin to a well-chiseled key, your beloved customers are the lock that key snugly fits into.
Entrepreneurs don’t delight consumers by first aiming to create monopolies; they first aim to make mind blowing products and services – things that once experienced aren’t easily given up. Moreover, most founders credit tinkering, experimentation, and well-leveraged luck with their biggest breakthroughs. And if they’re being truthful, this means you do not plan to create a monopoly. You tinker toward it.