Stanford continued its wildly overcrowded How to Start a Startup course today with Silicon Valley’s outspoken libertarian billionaire Peter Thiel. The course is curated by Sam Altman, head of startup incubator Y Combinator. Each week, the course brings in another technology celebrity to share the secrets of the tech elite.

You can watch Thiel in all his low-key glory in the 30-minute lecture below. I’ve summarized the course in three quick quotes below.

“Competition is for losers”

The thrust of Thiel’s lecture — and his recent book, Zero to One — is that successful founders seek to create a monopoly. Thiel contends that all the most successful startups, from Google to Facebook, carved out a niche market under the radar of the established players.

Facebook, for example, started off with a maximum user base of 10,000 Ivy League students. After growing like wildfire, it opened up registration to all universities, then to high school students, then to the world. “You want to go after small markets if you’re a startup,” he concludes.

“You want to be the last company in a category. Those are the ones that are really valuable.”

You don’t need to create an entire new genre to compete. The iPhone wasn’t the first smartphone. Plenty of phones, from Windows to Palm, had Internet and app-capable devices. But Apple aimed to be the best. Likewise, Facebook and Google each eventually went after a larger market and are aiming to be the last of their kind.

Thiel is also not a fan of defining yourself in relation to something else, like the ‘Uber of dog sitters.’ Claiming to be the Stanford of North Dakota doesn’t mean that the school is good. “The something of somewhere is mostly just the nothing of nowhere.”

“I am personally skeptical of all the Lean Startup methodology. I think the really great companies did something that was sort of a quantum improvement that really differentiated them.”

Thiel fielded a question about author Eric Ries’s famous “Lean Startup” method of shipping often and constantly improving. Thiel seems to imply that this creates an undue obsession with user taste. Instead, he says, create something in a small category that is levels above everyone else. Google’s PageRank algorithm was far superior to anything that Alta Vista or the big names were doing at the time.

You can check out the full curriculum for How to Start a Startup on the class website here.