Book: “Zero to One”

“Zero to One: Notes on Startups, or How to Build the Future” by Peter Thiel and Blake Masters

• “What important truth do very few people agree with you on?”
  • Arthurs went in detail explaining why this is a difficult question to answer. See the next quote
• “Most answers to the contrarian question are different ways of seeing the present; good answers are as close as we can come to looking into the future.”
• “In a world of scarce resources, globalization without new technology is unsustainable.”
• “In the most dysfunctional organizations, signaling that work is being done becomes a better strategy for career advancement than actually doing work (if this describes your company, you should quit now).”
• “what valuable company is nobody building?”
• “if you want to create and capture lasting value, don’t build an undifferentiated commodity business.”
• “Since they very much want their monopoly profits to continue unmolested, they tend to do whatever they can to conceal their monopoly—usually by exaggerating the power of their (nonexistent) competition.”
• “Entrepreneurs are always biased to understate the scale of competition, but that is the biggest mistake a startup can make. The fatal temptation is to describe your market extremely narrowly so that you dominate it by definition.”
• “The competitive ecosystem pushes people toward ruthlessness or death.”
  • This is definitely possible. Competition can also drive innovation.
• “Monopolists can afford to think about things other than making money; non-monopolists can’t.”
  • I do not disagree. Author also left out the detail that “things other than making money” may include lavish parties, generous executive compensations, which authors also do not recommend for startups, and other negative qualities that are well documented. Monopolies can be good as well as bad, depending on how people running the companies.
• “Creative monopolists give customers more choices by adding entirely new categories of abundance to the world.”
• “the history of progress is a history of better monopoly businesses replacing incumbents.”
• “Then monopolies can keep innovating because profits enable them to make the long-term plans and to finance the ambitious research projects that firms locked in competition can’t dream of.”
  • Only if they can maintain an innovative cultural. Some companies lost their ability to be innovative organically, so they acquire other companies.
• “the history of progress is a history of better monopoly businesses replacing incumbents.”
• “‘All happy families are alike; each unhappy family is unhappy in its own way.’ Business is the opposite. 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.”
• “In a single tweet, Yahoo! summarized Mayer’s plan as a chain reaction of ‘people then products then traffic then revenue.'”
• “every startup should start with a very small market. Always err on the side of starting too small.”
• “The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.”
• “Grandmaster José Raúl Capablanca put it well: to succeed, ‘you must study the endgame before everything'”
• “you should do what you could, not focus on what you couldn’t.”
• “Eroom’s law—that’s Moore’s law backward—observes that the number of new drugs approved per billion dollars spent on R&D has halved every nine years since 1950.”
• “Every individual is unavoidably an investor, too. When you choose a career, you act on your belief that the kind of work you do will be valuable decades from now.”
• “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.”
• “Social elites have the most freedom and ability to explore new thinking, but they seem to believe in secrets the least. Why search for a new secret if you can comfortably collect rents on everything that has already been done?”
  • This contradicts author’s earlier claim about monopolies. In this case, monopolies can also “comfortably collect rents” instead of “search for a new secret”.
• “I stress this so often that friends have teasingly nicknamed it ‘Thiel’s law’: a startup messed up at its foundation cannot be fixed.”
• “A board of three is ideal. Your board should never exceed five people, unless your company is publicly held.”
• “A cash-poor executive, by contrast, will focus on increasing the value of the company as a whole.”
• “Why work with a group of people who don’t even like each other?”
• “Since time is your most valuable asset, it’s odd to spend it working with people who don’t envision any long-term future together. If you can’t count durable relationships among the fruits of your time at work, you haven’t invested your time well—even in purely financial terms.”
• “You’ll attract the employees you need if you can explain why your mission is compelling: not why it’s important in general, but why you’re doing something important that no one else is going to get done.”
• “everyone at your company should be different in the same way—a tribe of like-minded people fiercely devoted to the company’s mission.”
• “The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing. Every employee’s one thing was unique, and everyone knew I would evaluate him only on that one thing. I had started doing this just to simplify the task of managing people. But then I noticed a deeper result: defining roles reduced conflict. Most fights inside a company happen when colleagues compete for the same responsibilities.”
• “1. The Engineering Question: Can you create breakthrough technology instead of incremental improvements?
  2. The Timing Question: Is now the right time to start your particular business?
  3. The Monopoly Question: Are you starting with a big share of a small market?
  4. The People Question: Do you have the right team?
  5. The Distribution Question: Do you have a way to not just create but deliver your product?
  6. The Durability Question: Will your market position be defensible 10 and 20 years into the future?
  7. The Secret Question: Have you identified a unique opportunity that others don’t see?”
• “If anything, we should be more tolerant of founders who seem strange or extreme; we need unusual individuals to lead companies beyond mere incrementalism.”
• “Founders are important not because they are the only ones whose work has value, but rather because a great founder can bring out the best work from everybody at his company.”

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