Book Notes: Zero to One - Peter Thiel


In Zero to One, the legendary entrepreneur and investor Peter Thiel shows how we can find singular ways to create new things, from zero (nothing) to one (now it exists).

Summary

Title: Zero to One: Notes on Startups, Or how to Build the Future
Author: Peter A. Thiel
Themes: Business, Entrepreneurship, Innovation, Products
Year: 2014
Publisher: Crown Business
ISBN: 0804139296, 9780804139298
Pages: 210

 
Peter Thiel is an entrepreneur and investor. He co-founded PayPal and Palantir. He also made the first outside investment in Facebook and was an early investor in companies like SpaceX and LinkedIn. 

Progress can be achieved in any industry or area of business. It comes from the most important skill that every leader must master: learning to think for yourself. 

"... Every moment in business happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them. Of course, it’s easier to copy a model than to make something new... "

Doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1. 

"... The paradox of teaching entrepreneurship is that such a formula (for innovation) cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be more innovative. Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas... "

A startup is the largest group of people you can convince of a plan to build a different future. Zero to One is about how to build companies that create new things.


When Peter Thiel interview someone for a job, he says in the book he likes to ask this question: what significant truth do very few people agree with you on?

The business version of the contrarian question is: what valuable company is nobody building?

This question is difficult, because a company can create a lot of value without becoming very valuable itself. 

"... Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away. The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business..."

Monopoly businesses can afford to think about things other than making money; non-monopolists can’t. This is not about illegal bullies or government favorites.  Here “monopoly” means the kind of company that’s so good at what it does that no other firm can offer a close substitute.

"... The problem with a competitive business goes beyond lack of profits. Imagine you’re running one of those restaurants in Mountain View. You’re not that different from dozens of your competitors, so you’ve got to fight hard to survive. If you offer affordable food with low margins, you can probably pay employees only minimum wage. And you’ll need to squeeze out every efficiency: That is why small restaurants put Grandma to work at the register and make the kids wash dishes in the back.

A monopoly like Google is different. Since it doesn’t have to worry about competing with anyone, it has wider latitude to care about its workers, its products and its impact on the wider world. Google’s motto—”Don’t be evil”—is in part a branding ploy, but it is also characteristic of a kind of business that is successful enough to take ethics seriously without jeopardizing its own existence. In business, money is either an important thing or it is everything. Monopolists can afford to think about things other than making money; non-monopolists can’t. In perfect competition, a business is so focused on today’s margins that it can’t possibly plan for a long-term future. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits
..."


All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.


Chapters of the Book:

 Preface: Zero to One

 01 - The Challenge of the Future
 02 - Party Like It’s 1999
 03 - All Happy Companies Are Different
 04 - The Ideology of Competition
 05 - Last Mover Advantage
 06 - You Are Not a Lottery Ticket
 07 - Follow the Money
 08 - Secrets
 09 - Foundations
 10 - The Mechanics of Mafia
 11 - If You Build It, Will They Come?
 12 - Man and Machine
 13 - Seeing Green
 14 - The Founder’s Paradox

 Conclusion: Stagnation or Singularity?

Peter Thiel is an entrepreneur and investor. He started PayPal in 1998, led it as CEO, and took it public in 2002, defining a new era of fast and secure online commerce. In 2004, he made the first outside investment in Facebook, where he serves as a director. The same year he launched Palantir Technologies, a software company that harnesses computers to empower human analysts in fields like national security and global finance. He has provided early funding for LinkedIn, Yelp, and dozens of successful technology startups, many run by former colleagues who have been dubbed the “PayPal Mafia.” He is a partner at Founders Fund, a Silicon Valley venture capital firm that has funded companies like SpaceX and Airbnb. 

Thank you! I hope you enjoyed!

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