동아시아의 평화와 화해의 정치학 Scrapbook: Zero to One

2021-03-28

Zero to One - Wikipedia

Zero to One - Wikipedia

Zero to One
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Zero to One: Notes on Startups, or How to Build the Future

Author Peter Thiel with Blake Masters
Country United States
Language English
Subject Business, Politics & Government
Publisher Crown Business

Publication date September 16, 2014
Pages 224 (first edition)
ISBN 978-0804139298
Website Official website

Zero to One: Notes on Startups, or How to Build the Future is a 2014 book by the American entrepreneur and investor Peter Thiel co-written with Blake Masters. It is a condensed and updated version of a highly popular set of online notes taken by Masters for the CS183 class on startups, as taught by Thiel at Stanford University in Spring 2012.[1][2][3]

Contents
1Promotion
2Reception
3References
4External links
Promotion[edit]

To promote the book, Peter Thiel sent out his first tweet ever on September 8, 2014, from a Twitter account that had been dormant for years. He was also interviewed by Alexia Tsotsis of TechCrunch.[4] On September 9, Thiel did a podcast with Timothy Ferriss for the latter's show.[5] On September 11, Thiel did an Ask Me Anything on Reddit.[6][7][8]

On September 13, Thiel appeared on NPR with host Wade Goodwyn to discuss the book.[9]
Reception[edit]

In the Atlantic, Derek Thomson describes Thiel's book as possibly the best business book he has ever read. In his review article, he wrote: "Peter Thiel's new book, Zero to One, shines like a laser beam. Yes, this is a self-help book for entrepreneurs, bursting with bromides and sunny confidence about the future that only start-ups can build. But much more than that, it's also a lucid and profound articulation of capitalism and success in the 21st century economy" and "it's surprising in a wonderful way just how simple Zero to One feels. Barely 200 pages long, and well lit by clear prose and pithy aphorisms, Thiel has written a perfectly tweetable treatise and a relentlessly thought-provoking handbook".[10]

Publishers Weekly wrote of the book: "Thiel touches on how to build a successful business, but the discussion is too abstract to offer much to the next Steve Jobs—or Peter Thiel."[11]

In November 2014, Timothy B. Lee reviewed the book for Vox.com, writing that although Thiel's book contained some good advice, he made the advice sound more contrarian than it really was, did not provide sufficiently concrete advice, and made some questionable claims.[12]

In The New Atlantis, James Poulos compares Thiel to Frederich Nietzsche and argues Thiel, "the most political and theoretical of the supernerds," writes esoterically in Zero to One, when he "raises the prospect of a remarkably comprehensive failure among our best and brightest."[13]
References[edit]

^ "Zero to One". Retrieved September 13, 2014.
^ Masters, Blake. "Notes Essays—Peter Thiel's CS183: Startup—Stanford, Spring 2012". Retrieved September 13, 2014.
^ "What's the difference between Blake Masters' notes from CS183 and his book "Zero To One"?". Quora. Retrieved September 13,2014.
^ Buhr, Sarah (September 8, 2014). "Peter Thiel Tweets". TechCrunch. Retrieved September 14, 2014.
^ Ferriss, Timothy (September 9, 2014). "The Tim Ferriss Show: Interview with Peter Thiel, Billionaire Investor and Company Creator". Retrieved September 14, 2014.
^ "Peter Thiel, technology entrepreneur and investor. AMA". Reddit. September 11, 2014. Retrieved September 13, 2014.
^ "Peter Thiel Reveals His Favorite Rap Artist and More in a Reddit AMA". Slate. September 11, 2014. Retrieved September 14, 2014.
^ Ferenstein, Gregory (September 11, 2014). "Peter Thiel goes after net neutrality, Uber, Bitcoin, and Hollywood (in 4 quotes)". VentureBeat. Retrieved September 14, 2014.
^ "Peter Thiel In 'Zero To One': How To Develop The Developed World". NPR. September 13, 2014. Retrieved September 14, 2014.
^ Thompson, Derek (2014-09-25). "Peter Thiel's Zero to One Might Be the Best Business Book I've Read". The Atlantic. Retrieved 2019-11-09.
^ "Zero to One: Notes on Startups, or How to Build the Future (book review)". Publishers Weekly. August 11, 2014. Retrieved September 14, 2014.
^ Lee, Timothy B. (November 30, 2014). "How Peter Thiel repackaged conventional wisdom as bold contrarianism". Vox.com. Retrieved December 19, 2014.
^ "Competing to Conform". The New Atlantis. March 2015. Retrieved February 13, 2016.
External links[edit]
Official website

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Book SummaryZero to One, by Peter Thiel
Book Rating by Shortform Readers: 4.8 (104 reviews)Zero to One is entrepreneur and venture capitalist Peter Thiel’s unconventional advice for technology startups. It’s about creating new things and also about creating a better future. Thiel, co-founder of PayPal and the first outside investor in Facebook, argues that technology has stagnated. Most new companies improve incrementally on existing products. They move the world from 1 to n.

But there’s much more to discover. The most valuable and game-changing startups create something new. They move the world from 0 to 1. Creating new things is not only the best path to economic profits—it’s the only path for human progress.

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1-PAGE SUMMARY1-Page Book Summary of Zero to One

In Zero to One, PayPal co-founder and venture capitalist Peter Thiel contends that creating new things is the best way to profit economically, as well as the only path for human progress.

However, technology has stagnated today. Much of what we do repeats or builds on what’s been done before. It’s easier to copy something than to create something new. This moves the world from 1 to n, refining something that already exists. However, creating something entirely new moves us from 0 to 1.

Unless companies create new things, they’ll eventually fail regardless of how profitable they are today. There’s a limit to what we can gain by refining things, a point at which best practices won’t get us any further. We need to break new ground.
The Path of Progress

Progress can be either horizontal or vertical. Horizontal or expansive progress results from duplicating success—going from 1 to n. This kind of progress is easy to envision because it looks a lot like the present. Vertical or intensive (focused) progress requires doing something entirely new—going from 0 to 1. It’s more difficult to envision because we’ve never seen it before.

For example, starting with one typewriter and building 100 of them would be horizontal progress (duplicating something). Starting with a typewriter and building a word processor would be vertical progress (creating something new).

Globalization is horizontal progress—it entails taking something that works in a particular place and replicating it everywhere. For instance, China’s 20-year plan is to be like the West is today.

Technology, going from 0 to 1, is vertical progress—it encompasses anything new and better, including but not limited to computers.

Continued globalization isn’t feasible without technological progress because the industrialization of more countries will lead to more environmental problems and competition for limited resources. For instance, if China doubles its industrial production without technology improvements, it will double its air pollution. Spreading the practices of developed countries globally will bring devastation rather than wealth. The key to a better future is both imagining and creating the technologies to get us there.
Startup Lessons

Startups consisting of a few people with a common mission are the source of most new technology. But many tech startups today are hobbled by four erroneous lessons drawn from the 1990s dot-com bubble and crash:
Make incremental advances: Be wary of big visions that drive bubbles. Move forward with small, incremental steps.
Stay lean and flexible: To stay lean and flexible, don’t tie your hands with planning. Instead, try things and iterate or build on the ones that work.
Build on the competition: Don’t try to create new markets. Build your business by improving on a product people are already buying from someone else.
Focus on product, not sales: If you have a good product, it should spread virally without a need for advertising.

Tech startups treat these lessons as sacrosanct, but they actually undermine success, especially big innovations. The opposite of each lesson is more accurate:
It’s better to be bold than inconsequential.
A bad plan is better than none.
Don’t compete: competition destroys profits.
Sales strategy matters as much as product.
Monopolies and Competition

Monopolies are good for society. While it may seem counterintuitive, they can be more ethical, treat workers with greater consideration, and create more value than companies locked in competition do.

Competitors are caught up in a daily struggle for survival. For instance, with their low margins, restaurants have to do everything possible to minimize expenses—which can include paying minimum wage to employees and putting family members to work for nothing. In survival mode, money is everything.

In contrast, in a monopoly where profits are assured, there’s room to consider other things besides money. For instance, lacking intense competition, Google can give consideration to its workers, its products, and its impact on society.

Monopolies’ bad reputation comes from sometimes earning outsized profits at the expense of society. Certain monopolies corner the market on something that’s needed and jack up the price; customers have no choice but to pay it. This works for the owners in a world where nothing changes, like in the game of Monopoly, where you control as much real estate as you can, but you can’t create new real estate.

In contrast, creative monopolies do good and drive social progress because they operate in a different environment, a dynamic one. Instead of controlling all the options like Monopoly real estate, they create new options. They expand consumers’ choices by creating new categories of things. By adding value, creative monopolies make society better.
Monopoly Characteristics

Monopoly businesses with strong future cash flows share several characteristics:
Proprietary technology: This may be your greatest possible asset because it makes your product difficult to copy. For example, proprietary technologies used in Google’s search algorithms for aspects such as query autocompletion make the search engine hard to replicate. For proprietary technology to give you a monopolistic edge, it needs to be at least 10 times better in some major way than anything like it. Anything short of a dramatic difference will seem incremental and unimportant.
Network effects: A network effect is the way additional users improve the value of a product or service for all users. For example, the more your friends use Instagram, the more value you get from being on it too. To generate network effects, your product has to be immediately valuable to its earliest adopters and then grow from there. A network business has to work on a small scale before it can go big—in fact, you have to...

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Zero to One Summary Introduction

Some animals have a drive to build things like dams but only humans have the ability to invent entirely new things. In Zero to One, PayPal co-founder and venture capitalist Peter Thiel contends that creating new things is the best way to profit economically, as well as the only path of human progress.

This book, written with Blake Masters, is about launching companies that create new things. It stems from a course Thiel taught at Stanford in 2012 on startups. Masters was a student in the class and his notes, which were widely shared online, evolved with Thiel’s collaboration into this book.

The ideas are drawn from Thiel’s...

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Zero to One Summary Chapter 1: The Challenge of the Future

Thiel likes to ask job candidates what he calls a contrarian question: “What important truth do few people agree with you on?” The best answers point to the future.

Thiel’s answer is that most people think globalization will dictate or determine the world’s future, but he believes it’s technology that will.

The future will be rooted in today’s world, but different. It may be farther away or closer than we think, depending on the degree of progress we make. If things aren’t likely to change much over the next century, then the future is a century away; If they’re destined to change rapidly in the next decade, then the future is a decade away.

Answering the contrarian question is the closest we can come to predicting what will be.
The Path of Progress

Progress can be either horizontal or vertical. Horizontal or expansive progress results from duplicating success—going from 1 to n. We can easily envision this kind of progress because it’s much like the present. Vertical or intensive (focused) progress requires doing something new—going from 0 to 1. It’s more difficult to envision because we’ve never seen it before.

For example, starting with one typewriter...

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Zero to One Summary Chapter 2: Lessons of the Dot-Com Bubble

Remember the question, “What important truth do few people agree with you on?” To get an answer that points to the future, start with another question: “What does everyone agree on?”

The real truth is often the opposite of what everyone agrees is true. When you’re blinded by the latest conventional wisdom, you can’t create anything new.

Conventional wisdom helped create the dot-com bubble. The basic principle that companies need to make money was replaced in the late 1990s by a delusion that became the new conventional wisdom: companies racking up enormous, unending losses are actually succeeding because the losses are investments in future success. In the “New Economy,” where no loss was too big to tolerate, page views became a more relevant metric than profits.

We understand how wrong these accepted beliefs were only in retrospect. When they fall apart, we refer to the delusional beliefs as a bubble. But bubbles continue to influence our thinking long after they collapse because we draw the wrong lessons from them.

The tech bubble of the 1990s was the biggest bubble since the one ending in the Wall Street crash of 1929—the “lessons” of the dot-com dictate the way we...

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Zero to One Summary Chapter 3: Myths about Competition and Monopoly

Anyone considering a startup should ask: “What valuable company hasn’t been built yet?”

Some companies create value without being valuable (profitable), but that isn’t enough to be successful (sustainable). A company has to accrue some of the value it creates.

Airlines in 2012 were a prime example of companies that create value without keeping much—they served millions of passengers, creating value of hundreds of billions of dollars, but made little money per passenger. While airfare averaged $178 each way, they made 37 cents per passenger trip. In contrast, Google created less value but brought in far more money—more than 100 times the airline industry’s profit margin that year. Google is worth more than three times the airline industry.

The difference is their markets: the airline industry is competitive, while Google benefits from monopoly status.
Perfect Competition

Economists have two models for markets: “perfect competition” and monopoly; perfect competition is considered to be the ideal.

Perfectly competitive markets are balanced: supply matches demand. The products are basically the same regardless of which company sells them. The price is whatever the...

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Zero to One Summary Chapter 4: Destructive Competition

The myth of healthy competition persists because competition is an ideology deeply embedded in our society. Because it distorts our thinking, it’s destructive to businesses and people. We preach and believe in competition, internalizing its commandments. But we get less, rather than more, when we compete.

The obsession with competition starts in the school system. We pit students against each other with grades. We minimize differentiation among students (like we do with business commodities in a competitive market) by teaching everyone the same subjects in the same way, regardless of individual learning styles and talents.

Students with top grades advance to higher education, where competition intensifies. High school dreams die and students become conformists, competing intensely for a leg up in conventional careers like investment banking. On the job, they compete for the same trappings of success. However, by being totally focused on competition, they lose out on the chance to do or create something new.
War and Business

In the workplace, war metaphors abound: we refer to headhunters, our sales force, captive markets, strategy, market penetration, and making...

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Zero to One Summary Chapter 5: Building for Future Profits

A monopoly by definition has avoided competition, but to be a great business, there’s more: it must last into the future.

To understand how this works, compare the New York Times Company with Twitter. Each employs thousands of people and delivers news to millions. However, in 2013, Twitter was valued at $24 billion, which was 12 times the Times’ market capitalization. Yet the Times earned $133 million in 2012, while Twitter lost money. How could the money-losing Twitter be worth more than the money-gaining Times? (Shortform note: market capitalization is the total value of a company's shares of stock.)

The reason for the dramatic difference in value is cash flow—the hallmark of a great business is its ability to generate future cash flow. Investors expected Twitter to generate monopoly profits for the next 10 years, while investors believed the New York Times lacked that ability.

A business’s current value is the sum of the profits it will earn throughout its lifetime. Low-growth businesses are those like newspapers that aren’t expected to grow dramatically in the future—most of their value is near-term. They might retain their value and keep current cash flows for...

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Shortform Exercise: Monopoly Profits

How your company chooses and expands its markets is critical to its success. You should target a small niche that you can dominate, then slowly expand to related markets and eventually larger markets while maintaining monopoly control.

Think about your business or a potential future business. How would you define the market (target customer and size, other potential players)? How could you check to make sure that your intended market actually exists?

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Zero to One Summary Chapter 6: Success Comes from Planning

Businesspeople debate whether success comes from luck or design. Some popular writers and leaders emphasize luck and downplay the importance of design or planning in contributing to success. This makes many people think planning—trying to shape the future—is pointless.

For instance, author Malcolm Gladwell writes in Outliers that success results from “lucky breaks and arbitrary advantages.” Warren Buffett notes that he was lucky to be born with certain qualities. Jeff Bezos and Bill Gates both claim luck played a role in their success.

It’s possible luck could play a role in an individual success, but luck isn’t sufficient to explain how the same person—for instance, Elon Musk, Jack Dorsey, Steve Jobs—could achieve a series of extraordinary, multibillion-dollar successes.

When Dorsey, the founder of Twitter and Square, tweeted in 2013 that “Success is never an accident,” most of the responses were dismissive, citing white male privilege over intelligent planning as the biggest factor in success. However, while connections, wealth, and experience—and luck—can be factors, in recent years, we’ve tended to ignore or overlook the importance of planning.

In the past, people...

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Zero to One: Notes on Startups, or How to Build the Future

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Zero to One: Notes on Startups, or How to Build the Future

by Peter Thiel, Blake Masters (Goodreads Author)

4.17 · Rating details · 215,436 ratings · 6,356 reviews

If you want to build a better future, you must believe in secrets.

The great secret of our time is that there are still uncharted frontiers to explore and new inventions to create. In Zero to One, legendary entrepreneur and investor Peter Thiel shows how we can find singular ways to create those new things.

Thiel begins with the contrarian premise that we live in an age of technological stagnation, even if we’re too distracted by shiny mobile devices to notice. Information technology has improved rapidly, but there is no reason why progress should be limited to computers or Silicon Valley. 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.

Doing what someone else already knows how to do takes the world from 1 to n, adding more of something familiar. But when you do something new, you go from 0 to 1. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. Tomorrow’s champions will not win by competing ruthlessly in today’s marketplace. They will escape competition altogether, because their businesses will be unique.

Zero to One presents at once an optimistic view of the future of progress in America and a new way of thinking about innovation: it starts by learning to ask the questions that lead you to find value in unexpected places. (less)

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Hardcover, 195 pages

Published September 16th 2014 by Crown Business

Original TitleZero to One: Notes on Start Ups, or How to Build the Future

ISBN0804139296 (ISBN13: 9780804139298)

Edition LanguageEnglish

CharactersElon Musk, Peter Thiel, Max Levchin

Literary AwardsGoodreads Choice Award Nominee for Business Books (2014)

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Popular Answered Questions

I really want to run my small business in this year. before starting i need to prepare well business's plan. so i think this book is suitable for me for this fist step. what should I do?

15 Likes · Like 5 Years Ago See All 11 Answers

Santiago Ortiz No, this book, used as guide, is a trap. Read Start Small, Stay Small: A Developer's Guide to Launching a Startup, real stuff there, not entrepreneuri…more

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This book had nothing insightful or unique to offer. I found myself nodding in common sense to many of the points. It reads like college notes (what it is based on) but I would've asked for my 3 credits back. Skip it?

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Thomas Yes. One man rambles about how he sees the world. If you want know more about startups spend your time smarter than I did and skip this book.

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Andrew Garvin

Aug 31, 2014Andrew Garvin rated it it was amazing

Having worked with Peter - and the PayPal mafia more generally - for almost 10 years now, I have a unique perspective on Zero to One. Many of the ideas contained within are familiar to me. The launching point for the book is Peter's stock interview question - a question he asked me 8 years ago.

'What is something you think is true, but that most people disagree with you on?'

My answer at the time (2006) was: 'There is a bubble in housing.' Of course, that was cheating, since I knew this was a pet idea of Peter's. Not surprisingly, he asked if I had another answer. I didn't, but I extemp-ed some bs about how FDI in Iraq was a good idea. Luckily I was strong enough in other ways to make it through.

His breakdown of this question and why it's so difficult to answer is incisive and in itself reveals a truth that is lying in plain sight. Very few ideas are both contrarian and correct. And, yet, finding that combination is critical to successful investing, entrepreneurship, or even career development.

The book moves at a quick, clear pace with examples generously distributed throughout. Even the Bible quotes (and nerd Bible quotes - i.e. Lord of the Rings) feel natural or at least refreshing. Moreover, as Peter is wont to do, there are several easter eggs or dog whistles in the text which hint at some of Peter's more unique ideas. Of course I am biased, but particularly in the 'business' category, Zero to One is a special and thought-provoking book. (less)

flag362 likes · Like · 13 comments · see review

Jacek Ambroziak

Dec 20, 2014Jacek Ambroziak rated it it was amazing

I thoroughly enjoyed the book even if I have found myself in violent disagreement with many of its thoughts. The book opens up with these words.

"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.

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 act of creation is singular, as is the moment of creation, and the result is something fresh and strange."

Initially, I kind of liked this quote. It is indeed hard to imagine a new business to threaten the dominance of Google Search or Facebook's social network. But the fact that Google search dominates is not really a zero-to-one effect, but a decisive improvement over previously existing internet search engines. Facebook was not originally conceived of as a dominant social platform; it so happened that it turned out to be well liked by millions of people beyond the original community of Harvard students. In operating systems we already have Linux and Android (using Linux) which have way more deployments than Windows. So it is not the case that "every moment in business" happens only once, unless in a very literal sense.

Peter discusses "copying" with disdain, but not all "copying" is just copying, a lot of progress happens via semi-continuous improvements. This civilization does not only progress by one-off disruptive inventions. A lot of it is steady improvements. And these improvements occasionally lead to enabling zero-to-one (or dominating) developments.

Peter asks "What company is nobody building?" Like the previous quote, this question has some charm, but I think it too is misleading. Well, maybe nobody is building this "company X" yet, because it is not yet fully enabled. Eg. voice over internet existed in the lab (IBM?) since mid 70's, but Skype made sense only much later when lots of people got access to personal computers and these computers started being connected to the Net all the time.

Bottom line: it is not all "zero to one", nor it can be or should be.

I still give the book 5 stars as I enjoyed its thought provoking character; it was an engaging reading: disagreeing, agreeing, learning new perspectives. Highly recommended but please don't treat it as Gospel :-) (less)

flag327 likes · Like · 28 comments · see review

Yevgeniy Brikman

Aug 09, 2014Yevgeniy Brikman rated it liked it

This book fluctuates between brilliance and madness. When it focuses on the mechanics of start ups, it's great. When it focuses on Thiel's philosophies, it's a bit whacky. Thiel enjoys being a contrarian too much. Doing something new and valuable may require being a contrarian, but just being contrarian doesn't mean your ideas are new and valuable. Worth reading if you're interested in startups, but be prepared to skim and shake your head.

Pros:

* Great chapters on how to build a monopoly, approach markets, luck, hiring, culture, and sales.

* lots of contrarian views that will force you to reconsider your own ideas

* Interesting outlook on the future of technology and humanity

* Clear writing

Cons:

* The ideas of vertical vs horizontal progress is nonsense. All ideas are horizontal, built incrementally on top of all the ideas that came before by people who came along at the right time and place. This includes the ideas behind paypal and palantir.

* Limited perspective on competition. It exists. It leads to better products for consumers. It hurts some businesses, but drives others to greatness.

* I disagree with Thiel's negative view of education. Yes, higher ed is too expensive and can be done better, but that's not the same as eliminating it. And if you want to change it, then have your companies stop filtering candidates by college degree.

* Dismissing a broad curriculum and saying everyone should study just one thing is absurd coming from a lawyer turned businessman who likes to quote a very wide array of human knowledge, including philosophy, history, physics, mathematics, medicine, economics, and mythology. It's also absurd since the fusion of ideas from different disciplines is what leads to much of innovation.

* Comparing hipsters to the uni bomber? Really?

Fun quotes:

As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage. Anything less than an order of magnitude better will probably be perceived as a marginal improvement and will be hard to sell, especially in an already crowded market.

By the time a student gets to college, he’s spent a decade curating a bewilderingly diverse résumé to prepare for a completely unknowable future. Come what may, he’s ready—for nothing in particular.

But leanness is a methodology, not a goal. Making small changes to things that already exist might lead you to a local maximum, but it won’t help you find the global maximum. You could build the best version of an app that lets people order toilet paper from their iPhone. But iteration without a bold plan won’t take you from 0 to 1. A company is the strangest place of all for an indefinite optimist: why should you expect your own business to succeed without a plan to make it happen? Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best.

As globalization advances, people perceive the world as one homogeneous, highly competitive marketplace: the world is “flat.” Given that assumption, anyone who might have had the ambition to look for a secret will first ask himself: if it were possible to discover something new, wouldn’t someone from the faceless global talent pool of smarter and more creative people have found it already? This voice of doubt can dissuade people from even starting to look for secrets in a world that seems too big a place for any individual to contribute something unique.

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.

Every great company is unique, but there are a few things that every business must get right at the beginning. I stress this so often that friends have teasingly nicknamed it “Thiel’s law”: a startup messed up at its foundation cannot be fixed.

You can’t accomplish anything meaningful by hiring an interior decorator to beautify your office, a “human resources” consultant to fix your policies, or a branding specialist to hone your buzzwords. “Company culture” doesn’t exist apart from the company itself: no company has a culture; every company is a culture. A startup is a team of people on a mission, and a good culture is just what that looks like on the inside.

All salesmen are actors: their priority is persuasion, not sincerity.

The most fundamental reason that even businesspeople underestimate the importance of sales is the systematic effort to hide it at every level of every field in a world secretly driven by it.

It’s better to think of distribution as something essential to the design of your product. If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business—no matter how good the product.

Tthe seven questions that every business must answer:

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? (less)

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Nick

Apr 19, 2014Nick rated it it was amazing

This review has been hidden because it contains spoilers. To view it, click here. The first book since Antifragile that had me hooked beginning to end. The definite/ indefinite paradigm had me thinking long after the book was finished. Fantastic.

Ch. 1 The challenge of the the future

The first chapter is an introductory piece on the creation of new value (going from nothing to something) thus zero to one as opposed to logarithmic and or incremental changes one to n.

- He argues that spreading old ways to create wealth around the world will only further globalize the world into sameness. This sameness means a universal current state. The downside to this is that everyone will now have a North American live style which requires a lot more energy and competition for the same resources. Thiel calls for a pursuit of new growth not a desire to spread the sameness around.

- He argues that old technologies still pervade our society and that new technologies will and should come from startups because large scale bureaucracies move slowly and entrenched interests in these organizations shy away from risk. In a lot of organizations signaling that your work is completed is more important than the work itself.

Ch. 2

- When growing a company exponential growth in size of your business also means exponential growth in your cost structure.

- Out of fear of a post 90's tech bubble do not treat the lessons learned as dogma. The goal of lessons is that the mistakes of the past are potential future realities not a determined future. Silicon Valley currently is trapped in this thinking that the bubble of the past dictates how we should act presently.

- Current tech companies focus on too much 1) incremental advances 2) have no idea where there business will go or what they will be doing 3) forego creating new markets and instead attempt to gain more ground in overcrowded markets 4) ignore sales completely

- The opposite is important 1) risk boldness 2) have a framework of where you'd like to take your company 3) search for new markets 4) sales matter as does product design not more though

Ch. 3 All Happy Companies are Different

- Ask yourself what valuable company is nobody building.

- Create value and then capture that value

- Choose to become a monopoly as competitive markets strip your profits away. Become a company so good at what you do that no one offers a close substitute. Differentiate your company from all others.

- Monopolists lies to protect themselves (google claims its an advertising company and thus has only 3% of the global advertising market but if it is to be considered a search engine company then it owns 67% of the search engine market).

- Competitive companies lie and exaggerate their share of the market to attract investors.

- Monopolistic profits allow companies to transcend the competitive struggle and focus on their employees.

-Monopolies can keep innovating and profits ease long term planning and make it more feasible to attempt ambitious R&D projects.

- Basic economics are a relic of the past.

- Every business is successful exactly to the extent that it does something others cannot.

- Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past.

- Is your market the right one to be in? Everybody loses when the war isn't worth fighting.

- Do not accumulate enemies. And if you can't beat a rival consider merging.

- Short term thinking diverts your focus from company growth and durability.

- Will your company be around in 10 years?

- Characteristics that may guarantee you dominance: proprietary technology, network effects, economies of scale, and brand.

- The problem with MBA types: initial markets are small that they often do not perceive them as opportunities.

- Choose small market demand with immediate product adoption.

- First dominate a specific niche and then scale to adjacent markets.

Chapter 6:

- How you perceive the future may dictate your outcome. Are you indefinitely pessimistic, definitely pessimistic, definitely optimistic or indefinitely optimistic.

- Indefinite pessimist: the future is bleak and there is nothing anyone can do about it.

- Definite pessimist: the future is bleak and must be prepared for.

- Definite optimist: the future will be better and everyone must work in a direction to make it better (Entrepeneurs)

- Indefinite optimist: the future will be better but how it will materialize is unforeseeable (law school students).

- Entrepeneurs do not view their future as out of their hands and are optimistic enough to plan for their future. They only sell their company when they have no plans for where they would like to take it.

- Long term planning has become undervalued in a world that only thinks in quarterly cycles and 4 year election cycles.

- A startup is the largest endeavour over which you can have some sort of control over your own destiny.

Ch. 7

- Venture returns don't follow a normal distribution, rather they follow a power law: a small handful of companies outperform all others.

- The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of fund combined. Every investment in your portfolio must have the potential to succeed at a vast scale. Less than 1% of companies started each year receive venture funding.

- You are an investor in yourself. When you choose a career you believe your line of work will be desired in years to come.

- An individual cannot diversify his own life by keeping dozens of possible careers in his back pocket.

Ch. 8

- What company is nobody building?

- Have unorthodox ideas and do not be afraid to hold these ideas. Having mainstream ideas that everyone else has is not a sign of progress. It is thinking with a contrarian-esk perception is where new ideas stem from.

- If you think something is hard you'll never try.

Ch.9 Foundations

- Thiel's law: a startup messed up at the beginning cannot be fixed.

- Bad decisions made early on such as choosing the wrong partners or hiring the wrong people can be very hard to correct after they are made.

- You cannot build something great on flawed foundations.

- When you start something the most important decision is who you start it with.

- Technical abilities and complementary skill sets matter, but how well the founders know each other and how well they work together matter just as much. Founders should have a prehistory before they start a company together otherwise it is just a gamble.

- The benefit of working for yourself is you have sole control of a vision the downside is that you don't gain the benefit of having a team.

- You need good people who get along but you also need a structure to keep everyone aligned for the long term.

- Sources of unalignment: ownership, possession and/ or control. Ownership: who owns equity. Possession: who runs the company on a day to day basis. Control: who governs the company's affairs.

- Be aware when bureaucracy is creeping into your company.

- Refrain from having conflict between investors and founders due to differing interests and priorities. Have a smaller board because the smaller the board the easier it is for people to reach consensus and for control to be exercised. Every person on your board matters because each has the possibility to bring an issue that you may have to deal with so be selective. A board of 3 to 5 is perfect.

- Everyone should be a full time employee (except lawyers and accountants) to keep your company aligned with your goals.

- A company does better the less its CEO makes. A CEO that takes a high salary in startup will defend his pay and the status quo while a CEO that takes less money or money equal to his founders and employees will work hard to ensure problems do not arise and when problems arise to help solve them. A cash poor executive will continually focus on creating value for his or her company.

- Anyone who prefers owning a part of your company rather than being paid in cash reveals a preference for the long term and a commitment to increasing your company's value.

- The most valuable kind of company maintains an openness to invention and new ideas.

Ch. 10

-Do not assemble a team by hiring the most talented people based on a resume or some other arbitrary metric of talent.

- Your time is your most valuable asset and thus create a team you would enjoy spending time with on a shared vision. You want a tight knit group not a team of free agents only looking out for themselves. Hire people who enjoy working together, excited about your vision and talented.

- Always ask yourself why someone would want to work for you not the inverse which is why should I hire them. If they ask why they should work for you you should be able to respond why your mission matters and why your team is a team people likeminded people where they could not afford to not want to join.

- Make every person responsible for doing just one thing by defining roles to reduce conflict. Avoid people overlapping each other doing the same job and thus leading to conflict over the same responsibilities. Eliminate competition among your employees by differentiating their tasks.

Ch. 11

- Never underestimate the importance of sales. Sales works best when hidden. The worst salesmen are the ones who let us know we are being sold to.

- A product is viral if its core functionality encourages users to invite their friends to become users to.

- You must also sell your company to investors and employees. Keep them engaged.

- You should never assume that people will admire your company without a public relations strategy.

Ch. 12

- Computers are complements for humans not rivals or substitutes. The most valuable businesses of the future will be created by entrepreneurs who seek to empower people rather than making people obsolete.

Ch. 13

- Companies should strive to make their product 10X better than their rivals because merely incremental improvements often end up meaning no real improvement at all for the end user.

- Entering a slow moving market can be a good strategy but only if you have a definite and realistic plan to take it over.

- Customers won't care about any particular technology unless it solves a particular problem in a superior way.And if you can't monopolize a unique solution for a small market you will be stuck with vicious competition.

Ask yourself 7 questions

1) Is your technology superior?

2) Is the timing right?

3) Do you have a monopolistic advantage?

4) Have you assembled a good team?

5) Do you have a good distribution chain?

6) How durable is your company?

7) Do you have any insight as to why your company is different?

Ch. 14

- The most important task in business is the creation of new value which cannot be reduced to a formula.

- We need unusual individuals to lead companies beyond mere incrementalism.

Ch. 15

- Always remember the first essential step is to think for yourself. (less)

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James Fairbairn

Aug 10, 2015James Fairbairn rated it it was ok

Starts well, becomes trite, ends delusional.

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Jamie

Jan 03, 2016Jamie rated it did not like it

I hate this book and I suspect that the feeling is mutual.

Zero to One is a bunch of thoughts about entrepreneurs and startups by Peter Thiel, co-founder of Pay Pal. The book doesn't have a central thesis or framework like many other business advice books. Rather, each chapter is more or less self contained set of thoughts about how someone starting a company should to go from "zero to one" (create something new where nothing like it existed before) instead of "one to two" (iterating on something or copying some existing service or product). There's a chapter on the 1999/2000 dot com boom, there's a chapter where Thiel shares his contempt for competing in an open market, a chapter on company culture, and more.

It's a bunch of nonsense that leans more towards being a polemic than a business advice book. It's mainly Thiel looking down on what he sees as the problems of the business world and trying to convince you that he has all the answers to problems nobody else has even thought of. This is super aggravating, since he is so partial to misstating an opposing point of view and making strawman arguments. He does it, for example, in the chapter about competition and monopolies where he brushes aside the generally accepted definitions of monopolies and competition and instead hacks them into new shapes to fit his arguments.

My biggest "this is BS" realization came with the chapter "You are not a lottery ticket." This was his examination of Malcom Gladwell's "luck plays a role in success" idea from the book Outliers. Thiel says that the serial entrepreneurship of a handful of people --many of them rich from previous successes or otherwise privileged-- is grounds for dismissing the role of luck or good timing in success. It's a dishonest and self-serving examination of the topic that ignores the fact that Outliers (and the work it was based on) all account for motivation and ability as well as luck. It's the worse, lazy, anecdotal, self-serving kind of thinking.

And once you realize that Thiel is out to misattribute, redefine, and cherry pick anecdotes in order to prop himself and his arguments up, you see it everywhere and you can no longer take anything he says at face value. He claims, for example, that nothing but information technology and communications technology have evolved much since the 70s. Which has to be untrue. We have made crazy advances in all kinds of fields --medicine, astrophysics, chemistry. I mean, are all those Nobel prizes undeserved? Thiel doesn't have the desire to research outside of his own world and so just makes proclamations that support his thesis at the moment.

Another example of Thiel just saying something to make it true: "This is why physics PhDs are notoriously difficult to work with --because they know the most fundamental truths, they think they know all the truths." (pg 104). Uh, [citation needed]. I could see an author making the same point by telling a story about a physicist (or some other scientist) he once worked with and found to be a pain in the ass. Then saying "people like Dave tend to..." Another writer may talk about the Dunning Kruger effect or about research showing how expertise in one field biases you in others. But no. Thiel is all in. He's too impressed with his own insights to do anything but write them down and move on.

Really, this is the work of a crank. It's more coherent and better written mechanically than a messageboard screed, but it's still the work of a crank. On page 96 he equates hipsters with the unibomber and religious fundamentalists. He's serious. The book has nothing to offer but platitudes and advice that's impossible to actually act on.

(less)

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====

Editorial Reviews

Review

“Crisply written, rational and practical, Zero to One should be read not just by aspiring entrepreneurs but by anyone seeking a thoughtful alternative to the current pervasive gloom about the prospects for the world.”

– The Economist

"An extended polemic against stagnation, convention, and uninspired thinking. What Thiel is after is the revitalization of imagination and invention writ large…"

– The New Republic

"Might be the best business book I've read...Barely 200 pages long and well lit by clear prose and pithy aphorisms, Thiel has written a perfectly tweetable treatise and a relentlessly thought-provoking handbook."

– Derek Thompson, The Atlantic

“This book delivers completely new and refreshing ideas on how to create value in the world.”

- Mark Zuckerberg, CEO of Facebook

“Peter Thiel has built multiple breakthrough companies, and Zero to One shows how.”

- Elon Musk, CEO of SpaceX and Tesla

" Zero to One is the first book any working or aspiring entrepreneur must read—period."

- Marc Andreessen, co-creator of the world's first web browser, co-founder of Netscape, and venture capitalist at Andreessen Horowitz

"Zero to One is an important handbook to relentless improvement for big companies and beginning entrepreneurs alike. Read it, accept Peter’s challenge, and build a business beyond expectations."

- Jeff Immelt, Chairman and CEO, GE

“When a risk taker writes a book, read it. In the case of Peter Thiel, read it twice. Or, to be safe, three times. This is a classic.”

- Nassim Nicholas Taleb, author of Fooled by Randomness and The Black Swan

“Thiel has drawn upon his wide-ranging and idiosyncratic readings in philosophy, history, economics, anthropology, and culture to become perhaps America’s leading public intellectual today”

- Fortune

"Peter Thiel, in addition to being an accomplished entrepreneur and investor, is also one of the leading public intellectuals of our time. Read this book to get your first glimpse of how and why that is true."

- Tyler Cowen, New York Times best-selling author of Average is Over and Professor of Economics at George Mason University

"The first and last business book anyone needs to read; a one in a world of zeroes."

- Neal Stephenson, New York Times best-selling author of Snow Crash, the Baroque Cycle, and Cryptonomicon

"Forceful and pungent in its treatment of conventional orthodoxies—a solid starting point for readers thinking about building a business."

- Kirkus Reviews

About the Author

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. He started the Thiel Fellowship, which ignited a national debate by encouraging young people to put learning before schooling, and he leads the Thiel Foundation, which works to advance technological progress and long- term thinking about the future.

Blake Masters was a student at Stanford Law School in 2012 when his detailed notes on Peter’s class “Computer Science 183: Startup” became an internet sensation. He is President of The Thiel Foundation and Chief Operating Officer of Thiel Capital.

Preface

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 net-work. 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 act of creation is singular, as is the moment of creation, and the result is something fresh and strange.

Unless they invest in the difficult task of creating new things, American companies will fail in the future no matter how big their profits remain today. What happens when we’ve gained everything to be had from fine- tuning the old lines of business that we’ve inherited? Unlikely as it sounds, the answer threatens to be far worse than the crisis of 2008. Today’s “best practices” lead to dead ends; the best paths are new and untried.

In a world of gigantic administrative bureaucracies both public and private, searching for a new path might seem like hoping for a miracle. Actually, if American business is going to succeed, we are going to need hundreds, or even thousands, of miracles. This would be depressing but for one crucial fact: humans are distinguished from other species by our ability to work miracles. We call these miracles technology.

Technology is miraculous because it allows us to do more with less, ratcheting up our fundamental capabilities to a higher level. Other animals are instinctively driven to build things like dams or honeycombs, but we are the only ones that can invent new things and better ways of making them. Humans don’t decide what to build by making choices from some cosmic catalog of options given in advance; instead, by creating new technologies, we rewrite the plan of the world. These are the kind of elementary truths we teach to second graders, but they are easy to forget in a world where so much of what we do is repeat what has been done before.

Zero to One is about how to build companies that create new things. It draws on everything I’ve learned directly as a co-founder of PayPal and Palantir and then an investor in hundreds of startups, including Facebook and SpaceX. But while I have noticed many patterns, and I relate them here, this book offers no formula for success. The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be 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.

This book stems from a course about startups that I taught at Stanford in 2012. College students can become extremely skilled at a few specialties, but many never learn what to do with those skills in the wider world. My primary goal in teaching the class was to help my students see beyond the tracks laid down by academic specialties to the broader future that is theirs to create. One of those students, Blake Masters, took detailed class notes, which circulated far beyond the campus, and in Zero to One I have worked with him to revise the notes for a wider audience. There’s no reason why the future should happen only at Stanford, or in college, or in Silicon Valley.

Chapter 1

The Challenge of the Future

Whenever I interview someone for a job, I like to ask this question: "What important truth do very few people agree with you on?"

This question sounds easy because it's straightforward. Actually, it's very hard to answer. It's intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon. And it's psychologically difficult because anyone trying to answer must say something she knows to be unpopular. Brilliant thinking is rare, but courage is in even shorter supply than genius.

Most commonly, I hear answers like the following:

"Our educational system is broken and urgently needs to be fixed."

"America is exceptional."

"There is no God."

Those are bad answers. The first and the second statements might be true, but many people already agree with them. The third statement simply takes one side in a familiar debate. A good answer takes the following form: "Most people believe in x, but the truth is the opposite of x." I'll give my own answer later in this chapter.

What does this contrarian question have to do with the future? In the most minimal sense, the future is simply the set of all moments yet to come. But what makes the future distinctive and important isn't that it hasn't happened yet, but rather that it will be a time when the world looks different from today. In this sense, if nothing about our society changes for the next 100 years, then the future is over 100 years away. If things change radically in the next decade, then the future is nearly at hand. No one can predict the future exactly, but we know two things: it's going to be different, and it must be rooted in today's world. 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.

Zero to One: The Future of Progress

When we think about the future, we hope for a future of progress. That progress can take one of two forms. Horizontal or extensive progress means copying things that work--going from 1 to n. Horizontal progress is easy to imagine because we already know what it looks like. Vertical or intensive progress means doing new things--going from 0 to 1. Vertical progress is harder to imagine because it requires doing something nobody else has ever done. If you take one typewriter and build 100, you have made horizontal progress. If you have a typewriter and build a word processor, you have made vertical progress.

At the macro level, the single word for horizontal progress is globalization--taking things that work somewhere and making them work everywhere. China is the paradigmatic example of globalization; its 20-year plan is to become like the United States is today. The Chinese have been straightforwardly copying everything that has worked in the developed world: 19th-century railroads, 20th-century air conditioning, and even entire cities. They might skip a few steps along the way--going straight to wireless without installing landlines, for instance--but they're copying all the same.

The single word for vertical, 0 to 1 progress is technology. The rapid progress of information technology in recent decades has made Silicon Valley the capital of "technology" in general. But there is no reason why technology should be limited to computers. Properly understood, any new and better way of doing things is technology.

Because globalization and technology are different modes of progress, it's possible to have both, either, or neither at the same time. For example, 1815 to 1914 was a period of both rapid technological development and rapid globalization. Between the First World War and Kissinger's trip to reopen relations with China in 1971, there was rapid technological development but not much globalization. Since 1971, we have seen rapid globalization along with limited technological development, mostly confined to IT.

This age of globalization has made it easy to imagine that the decades ahead will bring more convergence and more sameness. Even our everyday language suggests we believe in a kind of technological end of history: the division of the world into the so-called developed and developing nations implies that the "developed" world has already achieved the achievable, and that poorer nations just need to catch up.

But I don't think that's true. My own answer to the contrarian question is that most people think the future of the world will be defined by globalization, but the truth is that technology matters more. Without technological change, if China doubles its energy production over the next two decades, it will also double its air pollution. If every one of India's hundreds of millions of households were to live the way Americans already do--using only today's tools--the result would be environmentally catastrophic. Spreading old ways to create wealth around the world will result in devastation, not riches. In a world of scarce resources, globalization without new technology is unsustainable.

New technology has never been an automatic feature of history. Our ancestors lived in static, zero-sum societies where success meant seizing things from others. They created new sources of wealth only rarely, and in the long run they could never create enough to save the average person from an extremely hard life. Then, after 10,000 years of fitful advance from primitive agriculture to medieval windmills and 16th-century astrolabes, the modern world suddenly experienced relentless technological progress from the advent of the steam engine in the 1760s all the way up to about 1970. As a result, we have inherited a richer society than any previous generation would have been able to imagine.

Any generation excepting our parents' and grandparents', that is: in the late 1960s, they expected this progress to continue. They looked forward to a four-day workweek, energy too cheap to meter, and vacations on the moon. But it didn't happen. The smartphones that distract us from our surroundings also distract us from the fact that our surroundings are strangely old: only computers and communications have improved dramatically since midcentury. That doesn't mean our parents were wrong to imagine a better future--they were only wrong to expect it as something automatic. Today our challenge is to both imagine and create the new technologies that can make the 21st century more peaceful and prosperous than the 20th.

Startup Thinking

New technology tends to come from new ventures--startups. From the Founding Fathers in politics to the Royal Society in science to Fairchild Semiconductor's "traitorous eight" in business, small groups of people bound together by a sense of mission have changed the world for the better. The easiest explanation for this is negative: it's hard to develop new things in big organizations, and it's even harder to do it by yourself. Bureaucratic hierarchies move slowly, and entrenched interests shy away from risk. 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). At the other extreme, a lone genius might create a classic work of art or literature, but he could never invent an entire industry. Startups operate on the principle that you need to work with other people to get stuff done, but you also need to stay small enough so that you actually can.

Positively defined, a startup is the largest group of people you can convince of a plan to build a different future. A new company's most important strength is new thinking: even more important than nimbleness, small size affords space to think. This book is about the questions you must ask and answer to succeed in the business of doing new things: what follows is not a manual or a record of knowledge but an exercise in thinking. Because that is what a startup has to do: question received ideas and rethink business from scratch.

===

Editorial Reviews

Review

– The Economist

"An extended polemic against stagnation, convention, and uninspired thinking. What Thiel is after is the revitalization of imagination and invention writ large…"

– The New Republic

– Derek Thompson, The Atlantic

“This book delivers completely new and refreshing ideas on how to create value in the world.”

- Mark Zuckerberg, CEO of Facebook

“Peter Thiel has built multiple breakthrough companies, and Zero to One shows how.”

- Elon Musk, CEO of SpaceX and Tesla

" Zero to One is the first book any working or aspiring entrepreneur must read—period."

- Marc Andreessen, co-creator of the world's first web browser, co-founder of Netscape, and venture capitalist at Andreessen Horowitz

"Zero to One is an important handbook to relentless improvement for big companies and beginning entrepreneurs alike. Read it, accept Peter’s challenge, and build a business beyond expectations."

- Jeff Immelt, Chairman and CEO, GE

“When a risk taker writes a book, read it. In the case of Peter Thiel, read it twice. Or, to be safe, three times. This is a classic.”

- Nassim Nicholas Taleb, author of Fooled by Randomness and The Black Swan

“Thiel has drawn upon his wide-ranging and idiosyncratic readings in philosophy, history, economics, anthropology, and culture to become perhaps America’s leading public intellectual today”

- Fortune

- Tyler Cowen, New York Times best-selling author of Average is Over and Professor of Economics at George Mason University

"The first and last business book anyone needs to read; a one in a world of zeroes."

- Neal Stephenson, New York Times best-selling author of Snow Crash, the Baroque Cycle, and Cryptonomicon

"Forceful and pungent in its treatment of conventional orthodoxies—a solid starting point for readers thinking about building a business."

- Kirkus Reviews

About the Author

Preface

Chapter 1

The Challenge of the Future

Whenever I interview someone for a job, I like to ask this question: "What important truth do very few people agree with you on?"

Most commonly, I hear answers like the following:

"Our educational system is broken and urgently needs to be fixed."

"America is exceptional."

"There is no God."

Zero to One: The Future of Progress

Startup Thinking

Read less

Product details

ASIN : 0804139296

Publisher : Currency; Illustrated edition (September 16, 2014)

Language : English

Hardcover : 224 pages

ISBN-10 : 9780804139298

ISBN-13 : 978-0804139298

Item Weight : 12.8 ounces

Dimensions : 5.6 x 0.9 x 8.5 inches

Best Sellers Rank: #4,736 in Books (See Top 100 in Books)

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Top reviews

Top reviews from the United States

Marty Neumeier

3.0 out of 5 stars Is Peter Thiel the next robber baron?

Reviewed in the United States on June 27, 2017

Verified Purchase

In this chest-thumping book, author Peter Thiel comes off as a brilliant young man with a tendency toward exaggeration. Indeed, everything about him seems exaggerated: his businesses successes (founder of PayPal and Palantir), his net worth ($1.5 billion and counting), his educational credits (Stanford BA in philosophy, JD in law), his political views (avowedly libertarian), his energy level (off the charts), his self-confidence (not a doubt in sight), his vision for technology (human longevity, “seasteading” communities, eventual takeover by intelligent machines).

And now this book.

Let me assure you that Zero to One is worth reading, even if you’re not engaged in the world of startups and venture capital. It’s worth reading in the same way a triple espresso is worth drinking: it makes you feel superhuman, at least for the moment. You can almost hear the caffeine coursing through your veins as you absorb the ideas.

You might want to read the book on two levels: both as a business book and as a political manifesto. And because the book is a hybrid, you may need to work a little to separate the baby from the bath water.

Thiel’s first point is that creating a game-changing company means going from zero to one—from nothing to something, instead of going from something to a slightly better something. What a zero-to-one company does is lay claim to an uninhabited stretch of market space in order to create a monopoly. A monopoly, in Thiel’s vocabulary, is not the bad kind we associate with bullies. It’s the good kind that opens up valuable market territory by doing something new.

Is he simply using the word monopoly to provoke us? Maybe, but it’s an effective way to get our attention so he can deliver the book’s main point, which is simply this: Businesses succeed better when they differentiate rather than compete. Direct competition drains value as companies beat each other up. Differentiation creates value as companies charge more for desirable products and services that customers can’t get anywhere else. It’s the same principle that forms the basis of brand strategy. We’ve already seen many books on the subject, including Positioning in 1981, by Jack Trout and Al Ries, and even classical writings on strategy by Sun Tzu and Carl von Clausewitz.

Why play dress-up with old ideas? So Thiel can lash on his peg leg and black eye patch and make room for further piratical assertions.

Consider the following:

“Creative monopolists” give customers more choices by adding entirely new categories of abundance. The history of progress is the history of new monopolies replacing incumbents. “Every business is successful exactly to the extent that it does something others cannot.” Monopoly, therefore, is not a pathology but a condition of success.

While “every monopoly is unique,” he adds, they share these four attributes: “proprietary technology, network effects, economies of scale, and branding.” Without these four, any business will be the equivalent of a family restaurant, where the kids have to wash dishes to keep the place running in the black.

He advises us to “err on the side of starting too small.” The perfect place to start is where there’s a small concentration of people served by few or no competitors. From there you can scale it up, as long as you have the advantages of proprietary technology (your secret sauce) and network effects (the tendency of a service to become more valuable as more people use it).

Whatever you do, don’t “disrupt” a market, he warns. Disruption has been devalued to “a self-congratulatory buzzword for anything posing as something trendy and new.” Disruptive companies in Silicon Valley often pick fights they can’t win.

Also in Silicon Valley, “would-be entrepreneurs are told that nothing can be known in advance; we’re supposed to listen to what customers say they want make nothing more than a ‘minimum viable product,’ and iterate our way to success.” He says that Apple succeeded by doing the exact opposite.

He encourages would-be entrepreneurs to ask this question: “What valuable company is nobody building?” Any good answer to this question must necessarily harbor a secret. It can be a secret of nature or secret of human nature, but in both places there are always hidden truths to be discovered—if we only look in a certain way. When you share your secret, you turn others into co-conspirators.

With contrarian flair he asserts that the less money a startup pays its CEO, the better it will do. “In no case should a CEO of an early-stage, venture-backed startup receive more than $150,000 per year in salary.” High pay incentivizes him to defend the status quo instead of working aggressively to find and fix problems.

“The most important task in business—the creation of new value—cannot be reduced to a formula and applied by professionals.” He observes that most founders are contradictions, bigger-than-life characters who can “make authoritative decisions, inspire strong personal loyalty, and plan ahead for decades.” He cites Richard Branson, Howard Hughes, Bill Gates, and Steve Jobs, and tosses in pop icons such as Elvis, Lady Gaga, Michael Jackson, and Britney Spears.

Finally, he examines a range of scenarios for the future of humanity, borrowed from philosopher Nick Bostrom. The most common four are: 1) recurrent collapse, a never-ending oscillation between prosperity and ruin; 2) a plateau, the belief that the rest of the world will catch up to the richest countries, and then we’ll stay at that level; 3) extinction, in which our technology will bring humanity to a cataclysmic end; and 4) takeoff, the idea espoused by transhumanists, in which humans increasingly blend with machines to create a world of complexity and abundance that we can’t even imagine today. Clearly, Thiel is in this camp, although he’s careful not to say it.

This is a fascinating collection of thoughts, including some surprising truths and more than a few exaggerations. So which part of the book is the baby, and which is the bath water?

Let’s start with monopolies. Do they really serve society better than price-busting competitors? Sure, as long as they unleash creativity and generate broad-based wealth. When they mature into self-perpetuating bullies (such as Microsoft, and increasingly Google, Apple, and Amazon) they tend to block other innovators using any means at their disposal.

Next, does every business really succeed exactly to the extent that it does something different? Not quite. First of all, it’s possible to launch a product that’s different but not compelling. Think of Pets.com, Apple Newton, or Clairol Touch-of-Yogurt Shampoo. Second, monopoly status doesn’t always encourage broad success. Monopoly becomes pathology when we create rules that favor a handful of “haves” and in the process hollow out the middle class, as we’re doing now.

He notes that every monopoly is unique, sharing only “proprietary technology, network effects, economies of scale, and branding.” This is one of Thiel’s truest observations. Strong companies are those that start with a unique market position; weak companies are those that fail to differentiate, believing the world only wants more instead of different.

Erring on the side of starting too small is good advice, too, but what about “Don’t disrupt”? He laments that the concept of disruption has degenerated into anything posing as trendy and new. Granted. But wouldn’t it be better to simply reject the popular definition? He could then reaffirm Clay Christensen’s original epiphany in The Innovator’s Solution—the observation that established products can be upended by cheaper or inferior solutions that don’t at first appear to be threats, then later grow into established products themselves. Christensen was the one who first mapped the road to Monopolyville. Couldn’t Thiel give him the credit?

In a sweeping generalization, he claims that Silicon Valley engineers are expected to “listen to what customers say they want” and give it to them. Really? I’ve worked there 35 years and have rarely heard this, except from a few old-school marketers. Even the designers at Apple start with a “minimum viable product” and iterate their way to success. They just do it before they go to market instead of after, so their products seem to spring fully formed from the brow of Tim Cook or Jony Ives.

Thiel has said that one of the book’s most valuable contributions is the notion that a monopoly is based on a secret. This is actually a great way to think about it. An interesting fact about these types of secrets is that they tend to stay secrets long after you tell everyone. If an idea is good enough, goes the saying, you’ll have to ram it down people’s throats. Think about the Aeron chair, the Prius, and even PayPal. None of these businesses launched themselves.

Another of Thiel’s rules is that the CEO of a startup should never receive more than $150,000 in salary. Nice and concrete. It’s too bad more CEOs of incumbent monopolies couldn’t set a similar example, as Jobs did with his annual salary of $1. What message does a seven- or eight-figure salary send to the employee whose innovative ideas are consistently labeled “too risky?”

Finally, are successful monopolists always contradictory characters? Not from where I sit. Warren Buffet, Bill Gates, and Jeff Bezos don’t strike me as particularly contradictory, although I’m sure they’re more driven than they might appear. It could be that Peter Thiel himself is a walking contradiction, and therefore wants to create some positive context for it. He delights in courting controversy, starting at Stanford when he attacked various sacred cows such as political correctness and hate-speech laws in his newspaper The Stanford Review, and now by writing a book that appears to defend monopolists.

Despite its exaggerations, pirated ideas, and libertarian swagger—or maybe because of them—Zero to One makes for a lively read. It contains a number of refreshing insights and personal truths that you won’t get from other books on inventing the next big thing. Just keep the baby and throw out the bath water.

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Konstantinos Papakonstantinou

5.0 out of 5 stars The 4 minutes that will help you decide if this book is for you

Reviewed in the United States on April 3, 2015

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The first time I read the book, I didn't find it extremely insightful or cohesive. But the second time around it made a whole lot more sense. It's like all these connections started firing up. It's truly a great book with contrarian thinking and insights that make you pause. This video highlights some of these key concepts and hopefully will help you make the connections the first time around. It's part of a larger effort to create a completely-free library of compelling books in a handcrafted video format - check it out at bookvideoclub.com and enjoy!

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MicroCapClub

5.0 out of 5 stars A great book for microcap investors

Reviewed in the United States on February 28, 2016

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Have you ever read an article or book that defined something that you’ve abstractly believed for years? When you read it you let out an affirmative mental “aha!”. I had one of these moments recently when I read Zero to One by Peter Thiel. This book helped shape and better define my investment strategy.

Far too often I see a microcap company’s investor presentation start off with some enormous addressable market ($20 billion, $100 billion, etc) and what follows is “If we just capture 2%….”. This has always annoyed me because in many ways the worst thing an undercapitalized public microcap can do is try to attack a huge highly competitive market.

In Zero to One, Peter Thiel talks about how small emerging companies/and investors need to take the opposite approach. In simple terms, aim for monopoly, competition is for losers. Monopolies have far greater profits, pricing power, and ability to think long-term. For small companies like microcaps to be a monopoly they need to focus on dominating a small market that is expanding, and then further grow into other complimentary markets. “Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away.” When a company dominates a market (large or small) it is much more profitable and valuable then one owning 1% of a large competitive market.

When I look back at some of the best microcap performers they too had this characteristic of dominating a small market that is expanding rapidly. These companies normally have high organic growth rates, profitability, and pricing power. These powerhouse businesses can fund high rates of growth from internal cash flows. Their market leadership and profitability allows them to make longer-term strategic decisions that provide an even wider moat.

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D. House

5.0 out of 5 stars Will become a classic on how to build a remarkable (not ordinary) new enterprise.

Reviewed in the United States on March 7, 2017

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This is an excellent book. Not many people can be entrepreneurs, but I believe this book could inspire many and it can certainly guide one to a more open-minded approach. Peter Thiel shows us that unconventional thinking (i.e. zero to one), is absolutely required to succeed with a new business. Conventional thinking (for instance that competition is unavoidable (if you have something proprietary a la apple, it IS AVOIDABLE) , that competition is wonderful and necessary {but actually it is NOT}), is the linear approach (go from 1 to 1.1). Conventional means copy others and when you do that you have to compete mainly by cutting prices. The leading businesses truly innovate (and everyone else follows or stay behind). I started reading a library copy but realized I want to own it because I have to read it slowly many times like a good wine. The copy that I received is in great condition; good deal, thanks!

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Peter - The Reading Desk

4.0 out of 5 stars Step Change Innovation for Startups

Reviewed in the United Kingdom on July 7, 2018

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In business, we don’t get the panacea methodology to deliver a market-dominating business or monopoly, and the methodology for the next big thing likely hasn’t been defined yet. We need to look at each business from multiple perspectives and I do believe Peter Thiel provides another unique perspective – not a replacement perspective but an additional one. The research shows that disruptive innovation typically comes from new start companies and they tend to dominate a new market niche until they grow dramatically or are acquired. Iterative innovation in specific markets tends to be dominated by the incumbents, which are usually large multinational companies if the market is lucrative. So I agree with Peter Thiel, that new start businesses need to consider an order of magnitude value step change over existing solutions, to succeed, which is the zero to one transformation.

"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 act of creation is singular, as in the moment of creation, and the result is something fresh and strange."

Zero to One suggests a very different method from the lean-agile approach proposed by Steve Blank and Eric Ries in The Four Steps to the Epiphany and The Lean Startup respectively. They suggest that Customer Discovery, Validation, Creation and Building are the cornerstones of the startup approach.

I believe we need to start with a vision of what a successful business would look like, and we need to see that it will be significantly different (10x) from existing competitive solutions. How do we get there? By understanding and executing a market entry path that is iteratively to build, test & learn. I would also question Thiel’s suggestion that only technology enables that step change. In the cited case of Facebook, there were multiple solutions offering social media platforms and it appears the leadership and marketing of Facebook, were more the decisive factors. We could even argue that Facebook is an example of the Eric Ries approach.

The example of Paypal and Thiel’s insights into the economy and the investment community around the DotCom boom and bust were very interesting. The investor expectations are a constant challenge as I’ve heard from one investor that he wouldn’t get out of bed if a company wasn’t turning over €40million in 3 years and another saying if you showed me figures like that I’d think I was working with idiots with their heads in the clouds.

After the main point of vertical innovation is made, the book rambles and while the discussion points are interesting you often wonder what this has that to do with the main premise of the book. The book does feel a little unstructured and elements seem to be included as they were part of a lecture series rather than an integral part of a framework for achieving that 0 to 1 impact.

I would recommend reading this book as it may encourage and inspire you to consider where you want to go with the company and its core solutions. It does, however, need to be tempered with the knowledge that other approaches exist and Peter Thiel may be wrong, at least in parts.

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Gnana Shekhar Reddy

4.0 out of 5 stars Including success stories of Mark and Musk...

Reviewed in India on May 15, 2018

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Delivery: On promised day which is 2 days from ordered date. Packaging was good. Book came with air tight seal. Bookmark came with the book.

Book: Feels original, not a digital copy. But paper quality makes it doubtful.

Content: Author express the huge requirement of new ideas and uniqueness. Including success stories of Mark and Musk makes it interesting and inspirational to read.

2021-03-28

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