I was going to add in a very non-political way that who listens to Thiel? He’s exhibited bad judgement in for example writing a check to a particular campaign like yesterday that seems to be on the skids–hard to tell exactly but probably the campaign is not working out like Thiel’s candidate expected or his followers and Thiel is putting big bucks into the campaign despite this evidence that it’s lost both engines. (Let’s say that the political campaign in question is for Chief Dog Catcher, it might be for Mayor or Assembly or Trash Collector). In any event, at this late stage he wrote like a $1.5 million check for this uh dog-catcher campaign. Rather unwise I think.
“If you live away from centers of rabid competition, though, it will likely hurt your career, because in some measure you’ll fall asleep.”
To some extent, that’s probably true, but not in all professions or in all cases. There are people who are very self-motivating, who may do their best work in a vacuum of their own making, without distractions. There are also outlier islands of innovation. Fifteen minutes from where I live in “Nowheresville” (think: Rust Belt meets the Appalachians) is an environmental research station associated with a Flagship University two hours away. An acquaintance working there presents her findings at national and international conferences several times a year, and she just returned from a sabbatical on the West Coast. She’s certainly not falling asleep.
But the restaurant in Palo Alto? I agree we can’t replicate the crowd there, or the food. Sometimes that’s a very good thing and at others, yes I do feel a bit drowsy at the local diner 
And I wish I didn’t have to drive my daughter eighty miles across the mountains to find a decent ballet class…
Some talented and smart persons choose companies that are comparable to New York or Silicon Valey in reputation and payscale, but without 80-hour workweek, high living costs or low quality of life. And they have more opportunities for promotions, professional education etc, due to less “rabid competition”. That’s exactly what both kids did 
In terms of whether a concentration of talent in your area is desirable (e.g. more likely to find other talented people to do something that requires more than just your talent), undesirable (e.g. more competition, higher cost of living), or neutral, it depends on what your talent is and what you are trying to do with it.
California does have one feature that long predates the computer industry, but may have helped produce the “startup culture” in the computer industry, and currently serves as an attractor for talented employees. That is a law which makes almost all employee non-competition agreements clearly unenforceable.
http://www.bloomberg.com/news/articles/2015-03-17/silicon-valley-is-the-world-s-innovation-capital-because-of-a-technicality
https://techcrunch.com/2016/02/18/silicon-valley-keeps-winning-because-non-competes-limit-innovation/
http://fortune.com/2015/07/01/noncompete-agreements/
The founders of my son’s company were from Stanford and Harvard, but chose to locate their start up elsewhere. It’s growing tremendously, so I guess they’re doing something right at the moment.
If you are a very talented person or a run of the mill person, life is a series of endless choices, and you hold a great deal of control. I am a run of the mill person. I live in Hawaii. I had my morning coffee at the beach, watched NFL on my lanai, and then made guava syrup from the tree in my backyard. Kids, if someone as ho-hum as me can pull this off, don’t let anyone tell you you only have two choices.
inthegarden, in a field like your acquaintance’s, traveling to present several times a year isn’t unusual, especially if you’re remote. It’s very difficult, also expensive, to sustain longterm. It’s a sign that she’s trying to stay alive in her field.
sbjdorlo, the issue is to do with who else is around, who there is to work and play with. The company founders have their own reasons, no doubt good ones, for going where they’ve gone. But if your son’s extremely talented, then yeah, he’s likely to chafe away from the centers, where things are cooking and there are lots of other extremely talented people around to start something up with.
Academia really isn’t like industry in that you don’t find all the universities clustered in a few areas. But unfortunately if you’re physically far removed from centers for your field, then yeah, the energy will be lower where you are, and it’s unlikely you’ll sustain that level of energy on your own. There’s just a lot less going on where it’s just you and maybe one or two colleagues.
I know people who’ve taken jobs far from the centers of their fields in academia, and yeah, they travel like maniacs. And then either they move to the centers or they cut back on the pace, because the amount of energy they have to put out just to get into ordinary conversations with faraway colleagues and stay in those conversations is unsustainable. Or they lose funding and along with it their travel money. The colleagues, remember, also have to put out energy to stay involved, and they have much less motivation to do it: they’ve got colleagues down the hall, or a subway stop away, or in a nearby city. It’s very easy to forget the colleague who’s five hundred miles away when you’re in the center, especially if the colleague’s grant didn’t get renewed and/or the college has cut back on travel funding.
If your work is not collegial work – if it’s a thing you do on your own – then this matters somewhat less. But not much work is that authorial.
People get defensive about these things because they believe that they’re being told they’re nothing if they’re not where the action is, or if the kids aren’t where the action is. And it’s not that they’re nothing. But there are good reasons why so much of the powerful work goes on where there are large concentrations of top people in the same fields. It’s not just that there are more of them; it’s the interactions that are possible without making a herculean effort just to have the interactions.
Then you get the people who take offense because they think you’re saying it’s the only way to live and that everything else is garbage. That is not what’s being said here. We’re talking about extremely talented people, and if you have that kind of talent, it’s nothing less than a hardship to be unable to use it fully.
I think it’s a misconception to think that the only way to improve is through competition with other talented people. Some people really strive hard and improve when they are the best, some people strive hard and improve independent of the kind of people they are surrounded by, and naturally some people are pushed forward by having competition.
For a lot of people, “no matter how well you do someone else will do it better” is really demotivating and it burns them out. If that’s the supposed advantage of being in a place like SV/NY then it’s clearly not for everyone - and clearly not for every talented person either.
My very casual observation is that many college grads do tend to flock to NYC, even my good friend’s son who grew up in bay area.
Actually, alot of people do. He is a very successful and philanthropic person:
http://www.insidephilanthropy.com/guide-to-individual-donors/peter-thiel.html
The reason this statement by Thiel struck a cord is that in my industry, the highest earners tend to be in the largest markets. In a previous job I worked at a professional services firm, and had information on exactly how much each of our 200+ professionals made. For doing the same job, those in New York, Chicago, LA and SF made three to four times that of professionals in mid-tier MSA’s like Nashville, Kansas City, Pittsburgh and the like. The salary potential was largely tied to the population of the home market, and I was wondering if others saw the same trend in different industries.
In some cases it makes perfect sense to move to a large population center and work there instead of in a small city. The problem is that Thiel paints with a broad brush and tries to say that people who don’t live in his specific choice of two cities (and their surroundings) do so because they aren’t talented enough rather than any number of other reasons.
@Postmodern got it right: "For those that need the literal meaning of the point made, I believe it to be: “NYC and SV have the largest number of opportunities for talented and ambitious people who aspire to the most traditional definition of success. But if he had said that no one would pay attention.”
nor would we be having this conversation. In my opinion, theil mostly got it right. (by way of disclosure, I worked for silicon valley firm for 10 years, projects on wall st for 30). If you want to challenge yourself against the best and brightest, collaborate with people from all over the world, work on leading-edge, world-class, large scale projects, NYC and Silicon Valley is where you go. Sure, there are notable exceptions, and yes, startups, in attempt to create a long-term cost advantage, may locate in osh kosh. but what happens if things don’t work out? do you have to move and pull your family out of the community and schools?
not to say there aren’t drop-dead, brilliant people in say little rock and charleston (and there are, I’ve worked with some), they’ve obviously made a different life choice.
There are a lot of large markets (size-wise) between NY/SV and Little Rock.
Peter Thiel has been accused of systematically discriminating against Asians. He also used his money to secretly fund a lawsuit to bankrupt Gawker. I don’t believe much of what he has to say
I am no fan of Thiel’s politics, but the accusation of him discriminating against Asians is most likely payback for his politics. As for bankrupting Gawker, that was a tremendous public service. Neither of those are reasons to disbelieve him.
The real reason to disbelieve him is because the “place to be” is industry dependent, and even then there are useful secondary markets. For example, both SV and NYC are poor choices to be at the forefront of medicine, or automotive techology, or energy.
If you’re in the media, then you may eventually hope to reach the major media markets on the coasts, especially LA and NY. But certainly there are some great places to start and make a career in regions in between, and the coasts themselves are long!
It would create all sorts of cognitive dissonance if you lived in SV or NY and did not believe it was only place to get high caliber tech jobs/work/ideas.
You have to convince yourself somehow that the insane traffic and high cost of living is worth it.
It’s very common among huge cities that people think that their city is the place to be. This is not limited to the US, much less to NYC or the SV cities.
If you want to make it big in cattle or oil or politics, other places might be better than NYC or SV. Plenty of people have made it big in other cities. Would Ben and Jerry have been successful in NYC?
If you want to make it big in cancer research you have your choice of Boston, Pittsburgh, Cleveland, Minneapolis, etc. If you want to make it big in medical devices, you can add San Diego (and others) to the list. If you are an exceptional musician, you need to put Philadelphia on your list. Austin, Seattle, Research Triangle, Northern Virginia- there are hubs of innovation and creativity going on all over the country- and truly talented and superior thinkers living and working in all sorts of places.
Etc. It’s very limited (and limiting) to assume that all ambitious and talented people are targeting the same 30 jobs.