Notes on Zero to One by Peter Thiel

2016-01-22

First impressions

I have read my fair share of startup books and I just finished one more. Peter Thiel’s “Zero to One: Notes on Startups, or How to Build the Future” was a very quick and enjoyable read (I finished it in two and a half working days).

It is a pretty recent book (2014) and a very insightful read for anyone who wishes to create something new. Although the book may read like it has been written for american unicorn startup entrepreneurs, I would recommend it to anyone who wishes to create something radically new, be it a company, NGO, scientific breakthrough or revolutionise art.

The book felt like a motivational piece to me. There were few practical advices (read The Lean Startup or The Four Steps to the Epiphany if that is what you are looking for), Zero to One is a collection of lessons learnt, advices and theories by the co-founder of Paypal and first investor in Facebook.

Notes and Takeaways

Go Big or go Home

The book is not called 0 to 0.25, nor is it called 1 to 2. Successful billion dollars create a completely new ecosystem and evolve in a world of their own. They don’t simply improve on an existing solution. They discover ‘secrets’ and build a company based on that secret.

For Paypal it meant creating a way of replacing the US Dollar with a different currency, for Uber it meant having anyone driving anyone else anywhere, for Facebook it meant allowing everyone to connect and share information with each others. Although these companies have evolved a lot since their creation, at the beginning there was someone who discovered a ‘secret’, something that nobody saw but now seems obvious to 90% of the planet.

The author summarises this as

What valuable company is nobody building?

Engineering Superiority

When founding a startup, you want to own a breakthrough technology. Be it a cure for cancer or a super efficient clean energy, you need something an order of magniture better than what is currently available. But technology only is not sufficient. Cf Guy Kawasaki’s Ice Factory to Fridge Story

Timing and Monopoly

One of the deciding factors for startup success is timing. Facebook would not have known the exponential growth it did, had it started in 1995. Timing is key and you want to be the last mover in order to expand by dominating one niche at a time. Cf this talk by Peter Thiel on the importance of achieving monopoly. Also this ted talk which explain that timing is the most deciding factor in startup success

Team

More important that a good distribution of skills, all the founding members need to be on the same wavelength. From outside, a startup should look like a cult, except that the ideas everyone believe in are good ones. Most startup fail because of internal dysfunctions and not because they got crushed by competition.

Sales / Distribution

It is a common mistake to think that the product will sell itself if good enough. This is a deadly mistake. A grandmaster salesman selling a crappy products might succeed. A perfect product with a crappy sales team has zero chance of succeeding. This is non negotiable.

Think far ahead

When preparing a business idea, have the end game in mind. End game meaning 20 years from now. Build a company that will last for decades. Build a company that will only start making money in a decade.

Don’t leave anything to chance

A lot of books and people will have you believe that success is pure luck. It is not. You need to have a clear idea of what the future will be and reach that place. The western world seems to live in uncertainty and this needs to change. A startup company is the best way to do that.