3. Book highlights
1. The biggest leaps in progress are vertical, not
horizontal
2. Monopolies rock
3. Founders need a vision to take their business
from zero to one.
4. photo: fortune magazine
the contrarian
“In a world of scarce resources, globalization
without new technology is unsustainable.”
5. silicon valley vs. thiel
Silicon Valley mentality
1. Make Incremental Advances
2. Stay Lean & Flexible
3. Improve on the Competition
4. Focus on product, not sales
Financial
Times
Apartmentlist
6. silicon valley vs. thiel
Peter Thiel mentality
1. Better to risk boldness than triviality
2. A bad plan is better than no plan
3. Competitive markets destroy profits!
4. Sales matter just as much as product
Silicon Valley mentality
1. Make Incremental Advances
2. Stay Lean & Flexible
3. Improve on the Competition
4. Focus on product, not sales
Financial
Times
Apartmentlist
7. sales is as important as product.
You have a bad business
Invented
something new
Don’t know how
to sell it
8. The biggest leaps in progress are
vertical, not horizontal
...take something from zero to one.
9. what is a good idea?
...take something from zero to one.
1 to n
0 to 1
18. why work at [your] startup?
You can do irreplaceable work on a
crazy problem with amazing people
that no one else is going to get done.
19. every business must answer:
1. Is it a breakthrough vs. incremental improvement?
2. Is now the right time to start your particular
business?
3. Are you starting with a big share of a small market?
4. Do you have the right team?
5. Do you have a way to deliver your product?
21. If you’re interested MORE
Arts & Ideas at the JCCSF
https://www.youtube.com/watch?v=aYPj0jLzoQw
Original Notes that Formed the Book
http://blakemasters.com/peter-thiels-cs183-startup
Stanford Y-Combinator Startup Class
Lecture 5: Business Strategy and Monopoly Theory
http://startupclass.samaltman.com/courses/lec05/
a16z Podcast: The (Definite) Optimism of Peter Thiel
http://a16z.com/2014/10/17/a16z-podcast-the-definite-optimism-of-peter-
thiel/
Editor's Notes
There are some books that give you great strategies for selling, marketing and planning your business. And then there are books that tell you to forget about all of that, so you can take an approach that’s so radically different, that you won’t even play in the same league as the readers of those other books.
This is one of those books.
Peter Thiel is A chess master under age 21, a doctorate in law by age 25, and a company sale for $1.5 billion at age 35.
Zero to One is a book from Peter Thiel’s unconventional advice for technology startups. Thiel, co-founder of PayPal and the first outside investor in Facebook. Most new companies improve incrementally on existing products, but Thiel argues that the most valuable and game-changing startups create something new. They move the world from zero to one. Creating new things is not only the best path to profits—it’s also the only path for human progress.
Zero To One will teach us the way he thinks, how he approaches business, and what you can do to build your own startup’s and shape the future of the world in the process.
Here are my 3 lessons from the book:
The biggest leaps in progress are vertical, not horizontal: horizontal progress in business are 1 to n: for example: Microsoft build the PCs and make computers affordable, this is horizontal progress because this idea was existing idea. Peter Thiel focus on vertical progress: which is from 0 to 1, in which we create a new technology. For example, when apple launch their 1st iPhone in 2007, they change the whole world, in terms of how we use mobile phones.
Monopolies are good, for both business and society:
Founders need a vision to take their business from zero to one. It means founders need a new innovative idea to compete in market.
most people think the future of the world will be defined by globalization, but the truth is that technology matters more. Without technological change, if China doubles its energy production over the next two decades, it will also double its air pollution. If every one of India’s hundreds of millions of households were to live the way Americans already do— using only today’s tools— the result would be environmentally tragic. Spreading old ways to create wealth around the world will result in great damage, not riches. In a world of scarce resources, globalization without new technology is unsustainable.
This has been a debate over a decade: who is better. Because thiel challenge the way, people work in silicon valley.
Most businesses get zero distribution channels to work: poor sales rather than bad product is the most common cause of failure. If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.
Can you imagine what the year 2200 will look like? It’s hard, isn’t it? That’s because you know the world is making tremendous progress every year, but it’s almost impossible to know what that will look like.
But not all progress is created equal. Most of the progress we see on a day-to-day basis is horizontal. This kind of progress spreads existing ideas and technologies from one to many or 1 to n. An example would be Apple making the computer personal – with the Apple II it finally became affordable for the masses to own one.
Vertical progress is what it takes to go from zero to one and create the technology or idea in the first place. Apple did this too when they came up with the iPhone in 2007 and changed the way we see and use phones altogether.
If you want to create a startup that’ll not only improve but drastically change the world, you have to go from zero to one, not one to many. You can only do that by critically questioning a lot of the assumptions you hold about the present.
Can people live on the moon? Is a world without cars possible? Will we be able to fully live off renewable energies?
These are the kinds of questions you should concern yourself with if you want to play (and win) big.
You have to plan for your own success and no one will do it for you. This does not mean you will not get support from other people. But remember the other people will also support you in accordance with their plans. You should not copy and paste other people’s plans as your own. This is cheating! No long lasting success comes from negative circumstances.
What is monopoly: Monopoly is a kind of situation in market, in which the major portion of market is covered by a single company like, Microsoft in Operating system, Google in search engine and Apple in Mobile phones.
How often have you complained about something not working the way you want it on a Windows computer? Don’t tell me, I’ve been a Microsoft user, I know. With 75% of the market running on Windows, they’re pretty much a monopoly – but is that really a bad thing?
No! Peter Thiel says that a monopoly simply means one company is doing something so much better than everyone else, that simply no one else can survive. This is actually good for everyone. And this is because Microsoft doing better in technology networking, their economies and branding.
"For a company to be valuable it must grow and endure, but many entrepreneurs focus only on short-term growth. They have an excuse: growth is easy to measure, but durability isn't. If you focus on short-term growth, you miss the most important question you should be asking: will this business still be around a decade from now? Numbers alone won’t tell you the answer; instead you must think critically about the qualitative characteristics of your business.
The definite optimist has a concrete plan for the future and strongly believes in that future being better than today. The indefinite optimist is bullish on the future but lacks any design and plan for how to make such a future possible. The definite pessimist has a specific vision for the future but believes that future to be bleak. The indefinite pessimist has a bearish view on the future but no idea what to do about it.
Every startup is small at the start. Every monopoly dominates a large share of its market. Therefore, every startup should start with a very small market.
It’s easier to dominate a small market than a large one.
The perfect target market for a startup is a small group of particular people served by few or no competitors.
Any big market is a bad choice, and a big market already served by competing companies is even worse.
But building a monopoly surely doesn’t happen over night. Thiel and a 50 person Paypal team spent years getting it to a place where it was the number one payment processor used by ebay customers, so they could finally leverage their monopoly position into selling the company.
Where did they find the motivation to stick with it? One word: vision.
When you look at founders of successful companies, you’ll find 90% of them are, in a way, weirdos. Steve Jobs is only the most prominent example, but actually plenty of entrepreneurs have a few characterisctcs – and that’s good.
Being a little weird is what lets leaders develop a grand, if slightly delusional, vision for the future, which is exactly what companies need to go from zero to one.