Max Levchin And Peter Thiel: Innovation In The World Today Is Between ‘Dire Straits And Dead’

Peter Thiel and Max Levchin are busy guys. Thiel, aside from being on the Board of Directors for companies like Palantir Technologies, Geni, and Asana, an early investor and former board member at Facebook, and also happens to be founder and president of hedge fund Clarium Capital as well as Managing Partner of his VC firm, Founder’s Fund. Levchin was founder and CEO of Slide (which was acquired by Google), which he recently left when Google deadpooled all but one of Slide’s products.

Thiel and Levchin both famously steered PayPal (which they co-founded) through tricky waters during the crazy dotcom days, building it into the company we know today. Now, Thiel and Levchin are back working together, but this time on a different enterprise: A book. Along with Gary Kasparov, the two have written a book, called “The Blueprint: Reviving Innovation, Rediscovering Risk, and Rescuing the Free Market”, which is expected to be published in March 2012. At TechCrunch Disrupt in San Francisco today, Thiel and Levchin sat down with TC’s own Erick Schonfeld to talk about the changing face of innovation, disruption, and technology in the U.S.

According to Levchin, the basic premise of the book is, of course, “majorly controversial”, in that, despite what the popular media might tell us, innovation in the world today is actually “between dire straights and dead”. Both Levchin and Thiel said that they felt the need to call out the world, to wake up the average American, to the depressing state of deep innovation in our current landscape.

Although the tech industry has been one of the bright spots in the American economy, and every day a new Web 2.0 and 3.0 startup seems to pop up, both entrepreneurs are of the mindset that real, deep innovation is not taking place in today’s market. Instead, companies are solving small problems, creating features, and few are addressing the real, world-changing, hard problems that are still hiding behind the curtain. “It’s becoming a disaster which people in Silicon Valley aren’t even talking about”, Thiel said.

Levchin said that, while there isn’t a single cause of this innovation slow-down, they have both mutually come to the conclusion that the overall risk-taking culture has declined. The famous speeches that once inspired a generation to get behind the moon launch and NASA’s blasting our imaginations into space. Today, the space program is on its last legs, and privatized space travel is on the rise. But it’s a global problem, not just an American one.

Levchin said that we have all this technology that allows us to churn through ideas quickly, but “hard” is what often correlates to value, and startups today aren’s addressing enough “hard problems”. If you’re trying to find a new wrinkle to disrupt on Angry Birds, you’re not solving those hard problems.

“What’s desperately needed in our society”, Thiel said, “is companies that represent genuine progress, not just frantic change from one fashion to another”.