StarTrek, President Nixon, The Jetsons, and heading to the moon: No, this isn’t the 1970s, these were all spoken to last night by Peter Thiel at the MIT Enterprise Forum. Thiel, who co-founded PayPal, Clarium Capital, Founders Fund and was an early investor in Facebook, drew a huge crowd that filled the MIT Stata Center’s auditorium — including a line of waitlisters outside and by all accounts a refreshingly larger than normal student to suit ratio in attendance.

Thiel’s talk had a definite TED feel. It centered on technological progress as it relates to the advancement of society as a whole. Thiel put forward that the rate of technological progress has decelerated, encouraging entrepreneurs to address markets that are “out of fashion” and where there have not been significant technological breakthroughs in the last forty years: artificial intelligence, robotics, space, next-generation biotech, and computer technologies applied outside of computers.

On Technological Deceleration and the Advancement of Society

Thiel addressed his posit of technological deceleration first on the investment side by stating that the VC industry has not recovered since the late 1990s. “It’s basically been flat for a dozen years straight,” he said. Thiel pointed to progress in computers, telecom and Internet, but explained his belief that these markets are essentially saturated: that the innovations we are seeing now are incremental — not breakthrough.

He pinpointed the Internet, comparing its current state of innovation to the car industry’s growth from the 20s to 50s, where the industry went from just a couple of manufacturers to established brands that left only a few niches still to fill. And as for markets like biotech where there has been much activity, he offered, “People have been doing things, but not making a ton of money.” Thiel went on to cite examples of markets where there is high need for breakthroughs, such as in energy where decades of administrations have expressed the need to relieve our dependency on oil, yet the call has essentially fallen deaf on ears.

Thiel put forward a call to action, saying, “What I think we need to be trying to do is to dial the expectations back up and try to get back to working on the hard, breakthrough types of technologies that will really take our civilization to the next level.” How dire is the need for this type of action? “If we don’t, in fact, there will be no long term growth,” he stated.

On Building Breakthrough Companies

Thiel was candid that building the breakthrough innovations and companies he speaks to is not easy. On the markets with glaring needs for breakthroughs (artificial intelligence, robotics, space, next-generation biotech, and computer technologies applied outside of computers) Thiel offered, “Strikingly few people are doing these. It’s very out of fashion. It’s hard to get funded. But it is the kind of thing that if it gets traction, you have an incredibly valuable company.”

Thiel explained his firm belief that building these types of breakthrough businesses are just as risky as building an Internet company, for example, where there are very low barriers to entry (he described this as “endemic of web 2.0”). The difference: addressing opportunities in the former means you are setting yourself up for a monopoly. “Think hard about where you can create a business that will be so valuable you will have no competition at all, and have an extremely profitable business with a long-term franchise,” he said.

As for the types of people necessary to build these companies, Thiel firmly believes that breakthrough ideas do not necessarily require people who have a tremendous knowledge base. What he believes it does require: people who are willing to take enormous risk. Thiel pegs this risk as being the single, most significant factor in why technology has decelerated over the last forty years.

He went on to address our education system and the quarter-million in loans most great, young minds take with them after graduation as fundamentally hindering this. “If people have lots of obligations, it’s hard to make breakthrough companies.” With a majority of the audience students or recent grads, this drew much applause. As did his new widely-covered “20 Under 20” initiative, which is also working to address this.

Later in the night during the Q&A session, Thiel dove into the importance of a core team in building these great companies — something expressed often here in the Boston startup ecosystem, and is reflected in many of our Boston tech-mafia articles. We included a quick clip of his conversation around team alchemy, where Thiel even put forth that social network analysis of how deep the connections are between people on teams is likely a predictor of success:

Q&A Drummed Up Practical Advice and Lessons Learned

Some of the greatest learnings out of Thiel’s talk came during the Q&A session — both from MIT prof Ken Zolot and then from the audience, who fearlessly pushed him on his posit and positions. We included some of these dialogues below, but encourage everyone to check out the event in full on Justin.tv:

What do students in school do to get on the trajectory you set out?

Thiel said quite simply, “Learn.” He offered that often times this is not why people are in school, and went on to advise students to push themselves. “The conventional way is to get good grades … the non conventional way is to take the hardest classes.” He went on to encourage, “The future is not automatic … get involved.”

How do you start small and think big simultaneously?

Thiel provided his example of building PayPal in answering the question, advising entrepreneurs to have an idea of the big pictures and where it is going, but hunker down on a very specific way to start out.  PayPal’s big picture was to change money and be the “new world currency,” and in order to get there they focused through-and-through on building a business around where the platform worked early on: eBay. They have since focused on other channels, and today over half of the payments happening over PayPal are not on PayPal.

What do you think about TechStars and other models?

While he treaded lightly, Thiel stated being “pretty skeptical” of the models, noting that the success rate have not been very high and that they are too focused on making measurable progress in short time frames, which does not foster breakthrough companies. Thiel offered, “The question then becomes what is the ratio of ideas that are breakthrough versus incremental ideas, and I think by far more value in the aggregate is going to be created by breakthrough ideas than incremental ideas … breakthrough ideas will create much more value for our society, for the people involved, and for all the other various stakeholders.”

What about the many internet companies like Zynga that have created a lot of value?

Thiel went on to clarify that there are obviously incredibly valuable companies, particularly in the internet space, that can be created quite quickly. But he actually believes these companies are much riskier and harder to predict in their success than the types of breakthrough ideas he’s talking about. “The whole ecosystem has become more saturated … A lot of the internet businesses have become more like Hollywood movies where you have the right elements, you put them together in the right way, and hit things in the right angle, and it really takes off … But the elements combined in a slightly different way, and it doesn’t work at all. As the Internet has shifted from more of an engineering focus to more of a design-type focus, I think it has become significantly less predictable.”

Again, there were tons more learnings from Thiel’s talk, so make sure you check out a full video of the session here. And many kudos and thanks to the MIT Enterprise Forum for bringing Thiel to Boston.