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The Chess Concepts Peter Thiel Used To Become A Billionaire

•, Jonathan Wai
He's fascinated with human nature, and integrates what he learned from his former career as a chess master into his lectures.

Chess is a contained universe: there are only 32 pieces on the board and 64 squares those pieces can occupy. But starting up a company takes much more than raw intellectual ability; it requires what Thiel calls "The Mechanics of Mafia," or the understanding of complex human dynamics. Linking the two worlds is Thiel's passion. Here are some of the chess concepts he highlighted in his class, thanks to notes from one of his former students, Blake Masters:

Know the relative value of your pieces:

In chess, the queen is the most valuable piece on the board. In the standard valuation system, it is given a 9, whereas the rook (5), bishop (3), knight (3), and pawn (1) are lower. In his lecture Value Systems, Thiel mentions Guy Kawasaki’s equation on how to assess the value of a company based on the types of people you have:

Pre-money valuation = ($1M x Number of Engineers) – ($500k x Number of MBAs).

So engineers are more valuable pieces than MBAs.

1 Comments in Response to

Comment by Ed Price
Entered on:

Notice in the words from the article, "In the standard valuation system, it is given a 9 [the queen], whereas the rook (5), bishop (3), knight (3), and pawn (1) are lower," the word "king" isn't mentioned. Yet the king is the most important piece in the chess game.

Could it be that using a kingship format in America, while almost everyone else uses a democratic republic format (the United States of America) is the reason why some get rich and others remain poor? Maybe we all need to step up to the king's plate, assert our personal sovereignty, and take the whole kingdom back.

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