Zero to One - Notes on startup, or how to build the future - Peter Thiel


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 network.
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 best paths are new and untried.

THE CHALLENGE OF THE FUTURE

ZERO TO ONE: THE FUTURE OF PROGRESS

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. the truth is that technology matters more.

Advance in technology is not automatic. It needs to be created.

STARTUP THINKING

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.

LESSONS LEARNED

Make incremental advances.
Small, incremental steps are the only safe path forward.

Stay lean and flexible
“unplanned.”
You should not know what your business will do; planning is arrogant and inflexible. Instead you should try things out, “iterate,” and treat entrepreneurship as agnostic experimentation.

Improve on the competition
The only way to know you have a real business is to start with an already existing customer, so you should build your company by improving on recognizable products already offered by successful competitors.

Focus on product, not sales
Go for viral growth.

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.

THE IDEOLOGY OF COMPETITION

If you focus on near-term growth above all else, you miss the most important question you should be asking: will this business still be around a decade from now?

BUILDING A MONOPOLY

The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors. Any big market is a bad choice, and a big market already served by competing companies is even worse.
This is why it’s always a red flag when entrepreneurs talk about getting 1% of a $100 billion market.

Scaling up

Jeff Bezos’s founding vision was to dominate all of online retail, but he very deliberately started with books.

As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible.

THE LAST WILL BE FIRST

if you’re the first entrant into a market, you can capture significant market share while competitors scramble to get started?
What really matters is generating cash flows in the future, so being the first mover doesn’t do you any good if someone else comes along and unseats you
The way to do that is to dominate a small niche and scale up from there.
“you must study the endgame before everything else.”

YOU ARE NOT A LOTTERY TICKET

a definite person determines the one best thing to do and then does it. Instead of working tirelessly to make herself indistinguishable, she strives to be great at something substantive.

WHAT TO DO WITH THE POWER LAW

an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve.
Our schools teach the opposite (generic knowledge).

“it doesn’t matter what you do, as long as you do it well.” That is completely false. It does matter what you do. 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.

SECRETS

EVERY ONE OF TODAY’S most famous and familiar ideas was once unknown and unsuspected.
If there are many secrets left in the world, there are probably many world-changing companies yet to be started.

WHY AREN’T PEOPLE LOOKING FOR SECRETS?

Most people act as if there were no secrets left to find.
The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers.

HOW TO FIND SECRETS

There are two kinds of secrets: secrets of nature and secrets about people.
What secrets is nature not telling you? What secrets are people not telling you?

The best place to look for secrets is where no one else is looking. Most people think only in terms of what they’ve been taught;

FOUNDATIONS

FOUNDING MATRIMONY

When you start something, the first and most crucial decision you make is whom to start it with.
Choosing a co-founder is like getting married, and founder conflict is just as ugly as divorce.

Now when I consider investing in a startup, I study the founding teams. 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.