Peter Thiel's Zero To One Book Recap

Notes on notes on startups

Posted by Tomy Jaya on November 24, 2016

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

A few gems I managed to extract from this book includes:

  • Aim for vertical progress (i.e. 0 to 1). Therefore, be bold and take risks!
  • Start Small (dominate niche), scale up, and then build monopoly (long term vision).
  • Monopoly is not necessarily evil.
    • Competitive markets destroy profits
    • Even companies like Google downplay their monopoly by diluting their search engine market share with their brand as multi-faceted Tech company.
    • To Build monopoly, create: Proprietary Technology, Network Effects, Economies of scale, Branding
    • Be 10x better and escape competition
  • Last Mover Advantage:

“it’s much better to be the last mover - that is to make the last great development in a specific market and enjoy years or even decades of monopoly profits.

  • Again, start small:

“Paradoxically, network effects businesses must start with especially small markets”

E.g. Facebook starting exclusively as

  • Due to power law, you can’t blindly diversify. In startups, this means:

you should not necessarily start your own company. Even if you are extraordinarily talented. If anything, too many people are starting their own companies today. People who understand the power law will hesitate more than others when it comes to founding a new venture: they know how tremendously successful they can become by joining the very best company while it’s growing fast.

E.g. 100% of equity of your failed startup is nothing compared to 0.001% of Google. Hence, be wise and follow the money.

  • Beginning & Founders chemistry are key. Without these solid foundations, your company is doomed.
  • Computer & Humans hand in hand will be the future. E.g. CIA spies (human) + NSA wiretaps(data) = Palantir
  • 7 questions on startup:
    • Engineering: a breakthrough?
    • Timing: the right time?
    • Monopoly: a big share of a small market?
    • People: the right team?
    • Distribution: delivery feasible?
    • Durability: defensible market share for 10 to 20 years?
    • Secret: unique opportunity others don’t see?
  • Best founders bring out the best work from everybody in their company.