Zero to One:
Notes on Startups, or How to Build the Future
by Peter Thiel, Blake Masters
There is still a lot to discover and explore -
- and disruptive innovation is the one that we should desire,
creating new instead of improving what already exists.
Creating a new product
Improving something that already exists takes the world from 1 to n -
- the idea is not disruptive but based on old ideas adds little value.
Creating something completely new takes the world from 0 to 1 -
- the idea is fresh, the product is not similar to existing ones.
- It is more difficult to create innovative products in big corporations.
Small size affords space to think
and this is the most important aspect of new successful companies.
Power of monopolies:
- Capitalism & competition are opposites.
Capitalism is about generating profits,
while competition eliminates profits by lowering prices and margins.
Monopolies enjoy high profits and can afford future investments
as expected profits will compensate for the costs.
- Building monopoly should start from creating a product
for a niche market and then scaling up.
The product has to offer 10 times better
speed, performance or convenience benefit
than other competitive products.
- The key to success in value creation is to avoid competition.
- Monopoly can be protected by creating a network effect,
the economy of scale (growing business - lower production costs),
and branding (creating awareness - lower distribution costs).
- Even if we tend to think that we are living in the age
of fast development, the truth is that the majority of new products
are only improved versions, based on old technology.
The technological stagnation
should be broken - and it can be done in any industry.
- The lessons that we have learned in school are likely to not be valid anymore,
especially when it comes to technology.
We need to question our knowledge,
question what we think about the past
and how it impacts our thinking about the future.
It does not mean that what we know is not true
but we need to rethink it:
"not to oppose the crowd but to think for yourself".
- Success is not a matter of luck
but diversification in skills and education.
Schools are teaching the same program to everyone
leading everyone to be an average in everything.
It is important that people learn to think for themselves
and improve different skills than those learned in school.
- Contrarian thinking against Lean Principles:
❶ It is better to risk boldness than triviality.
❷ A bad plan is better than no plan.
❸ Competitive markets destroy profits.
❹ Sales matter just as much as a product.
- The most valuable businesses of coming decades will be built by entrepreneurs
who seek to empower people rather than try to make them obsolete.
- 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 (...)
- 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’ll be stuck with vicious competition.
- Ralph Waldo Emerson captured this ethos when he wrote:
“Shallow men believe in luck, believe in circumstances….
Strong men believe in cause and effect.
- In a world of scarce resources,
globalization without new technology is unsustainable.