Zero to One: Notes on Startups, or How to Build the Future
Peter Thiel
Description
The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. If you are copying these guys, you aren’t learning from them.
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. Every new creation goes from 0 to 1. This book is how to get there.
Key words: Business
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My Notes
If your product requires advertising or salespeople to sell it, it’s not good enough. The only sustainable growth is viral growth – a tribe.
Think for yourself.
Be a firm that’s so good at what it does, that no firm can offer a substitute.
Long term plan. Will this business be around a decade from now?
You must study the end game before anything else.
Start with a very small market concentrated together. It’s easier to dominate a small market than a large one.
The perfect target market for a start-up is a small group of particular people concentrated together and served by few or no competitors.
The most successful companies make the core progression - to first dominate a specific niche then to scale to adjacent markets.
As you craft a plan to expand to adjacent markets, don’t disrupt; avoid competition as much as possible.
A definite person determines the one best thing to do, then does it.
You can’t find secrets without looking.
Ownership, possession, control = alignment.
Must keep creating new things.
Solve a particular problem in a superior way
What will the world / industry look like in 10 years and how will you fit?
The most important task in a business is ‘the creation of new value’.
All failed companies are the same. They failed to escape competition.
How can the future get better if no one plans for it?
Why should you expect your own business to succeed without a plan to make it happen?
Jobs saw that you can change the world through careful planning, not by listening to focus group feedback.
You should focus relentlessly on something you’re good at doing, but before that you must think hard about whether it will be valuable in the future.
What important truth do very few people agree with you on?
What valuable company is nobody building? Every correct answer is necessarily a secret; something important and unknown, something hard to do but doable. What secrets are people not telling you? What is forbidden or taboo?
The best entrepreneurs know this; every great business is built around a secret that’s hidden from the outside. A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator.
To anticipate likely sources of misalignment, it’s useful to distinguish between these three concepts;
Ownership – who legally owns company equity?
Possession – who actually runs the company on a day to day basis?
Who formally governs the companies’ affairs?
If you want an effective board – keep it small.
A company will last as long as it’s creating new things. It will fail when creation stops.
A company needs to be a tribe of people fiercely devoted to the company’s mission.
On the inside, every individual should be sharply distinguished by his / her work.
Once you have a pool of reference customers who are successfully using your product, then you can begin the long and methodical work of hustling to even bigger deals.
Marketing and advertising work for relatively low-priced products that have mass appeal but lack any method of viral distribution.
Customers won’t care about any particular technology unless it solves a particular problem in a superior way.
The best problems to work on are often the ones nobody tries to solve.
The 7 questions every business must answer.
The engineering question - Can you create breakthrough technology instead of incremental improvements?
The timing question - Is now the right time to start your particular business?
The monopoly question - Are you starting with a big share of a small market?
The people question - Do you have the right team?
The distribution question - Do you have a way to not just create but deliver your product?
The durability question - Will your market position be defensible in 10 or 20 years into the future?
The secret question - Have you identified a unique opportunity that others don’t see?
“Only a firm that offers a superior solution for a specific problem can make money.“
