In this book summary of Zero To One by Peter Thiel, you’ll find my notes, valuable lessons, and important action steps.
Zero To One Summary
Using technology to come up with new solutions never done before is significantly more effective than using globalization to mimic the same methodology across the world.
Mega-successful entrepreneurs and startups are always questioning received ideas and creatively coming up with different alternatives to doing business that haven’t been done before. This contrarian thinking and opposing the crowd is how to create the future.
Competition sucks because, “Under perfect competition, in the long run no company makes an economic profit.” To create a tremendously profitable company like Google, look for a monopoly and not a regular commodity business. If you’re a wise business man, you’ll avoid competition at all costs.
The common characteristics of a monopoly are proprietary technology, network effects, economies of scale, and branding.
To succeed in business and rake in profits for years to come: start in a small niche, avoid competition, and scale up to your long-term vision to win the end game.
You as an entrepreneur and your startup are not a lottery ticket, so don’t act like it and hope for the world to randomly call your number. Instead, design your future like Steve Jobs did with Apple. That’s the path to global success.
The power law states that small minority of startups exponentially outperform the majority of startups in the long run. For a venture fund, often one investment will produce more profits than the rest of the investments combined. We live in a power law world, not a normal law with equal distribution.
The world is not flat. There are secrets out there that companies can discover and build a business around to change the world, like finding a cure for dementia. But, these secrets and missions will never be completed if everyone believes there are no secrets left to solve.
Since you can’t build a great company on a flawed foundation, it’s crucial you pick the right business partner, and also early employees or investors. Mess up the business partner selection, and the company is bound to fail.
“As a general rule: Everyone you involve with your company should be involved full-time.” Otherwise, their personal short-term interests will get in the way of the long-term interests of the company.
The best way to find the right employees is to narrow down on why the work is irreplaceable and would they enjoy working with you. It’s not a winning long-term move to recruit based on money or perks—everyone does that. You want people all in on your mission and who they get to work with!
“But advertising doesn’t exist to make you buy a product right away; it exists to embed subtle impressions that will drive sales later. Anyone who can’t acknowledge its likely effect on himself is double deceived.”
Any successful company needs a sales distribution. Don’t make the mistake of trying to get the kitchen sink with five different distribution channels, focus on one first until your company is stable. Most companies fail not because of their product or service, but their sales distribution.
Computers work best as complementary to humans. Smart entrepreneurs realize this and will build technology that empowers people, not takes away their jobs with automation. Because the team of computers working with humans is always better than an all human team or an all computer team.
If you care about the world, your company, your family, and yourself, your objective is to create new things to make the world better. To do that, you must think on your own, different.
The key is to start thinking with the business mindset of “what important truth do very few people agree with you on?” If you’re correct about that truth, not only will it be a financial goldmine but also improve the world.
Technology is more important and helpful in advancing society than globalization. Globalization actually will lead to chaos and potentially war because of competition. Helpful technology will lower the need to fight and create a better standard of living. If we want to improve the world, we need more people and organizations focused on innovation.
A startup is the single greatest way to be around a cult-like group of people on the same mission to better the world. And a startup’s main metric needs to be growth and sustainability, above short-term profits or anything else like number of employees.
Three Favorite Quotes
“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.”
“Elite students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them. Higher education is the place where people who had big plans in high school get stuck in fierce rivalries with equally smart peers over conventional careers like management consulting and investment banking. For the privilege of being turned into conformists, students (or their families) pay hundreds of thousands of dollars in skyrocketing tuition that continues to outpace inflation. Why are we doing this to ourselves?”
“A startup is the largest endeavor over which you can have definite mastery. You can have agency not just over your own life, but over a small and important part of the world. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.”
Action Steps For You
Let me ask you something: What’s stopping you from creating something the world hasn’t seen before? Peter Thiel says there’s nothing stopping you, unless you don’t think you can and don’t try.
If you find an idea the rest of the world hasn’t seen or has rejected, but it’s valuable to the market, that’s how you build the next monster like Google or Facebook.
You won’t do it by simply copying Apple in 2018. You need to think differently. You need to think on your own. Only then do you have the chance to create a new Apple that no one has executed on before.
So aim to look at the world with your own lens, not one you learned from school or the news.
By thinking on your own, you give yourself and the community around you the best shot you got at making a difference.
Order Zero To One
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