Synopsis

Zero to One by Peter Thiel is a book on startups that offers bold, contrarian ideas on how to build the future. Thiel looks at how society can make vertical progress – going from 0 to 1 – using technology to leapfrog conventional thinking.

I thoroughly enjoyed reading Zero to One. Thiel’s ideas and logic are refreshing and practical, while Masters’ writing is concise. It’s a must-read for all entrepreneurs.

The central thesis: what important truth do very few people agree with you on?

Thiel says this question has everything to do with the future because the future is going to be different, and it must be rooted in today’s world. He says good answers to this question are as close as we can come to looking into the future.

Thiel’s own answer to this question is that most people think the future of the world will be defined by globalization, but the truth is that technology matters more. In a world of scarce resources, globalization without new technology is unsustainable. Here he defines technology as “any new and better way of doing things.”

Interestingly he says we’ve been too distracted to notice that our surroundings are strangely old – a result of globalization.

This insight resonated with me because it reminded me of the importance of thinking independently and boldly. Thiel says, “the most contrarian thing of all is not to oppose the crowd but to think for yourself.”

All happy companies are different

The business version of the contrarian question is: what valuable company is nobody building?

The lesson for entrepreneurs is that if you want to create and capture lasting, vertical value, don’t build an undifferentiated commodity business. Thiel says, “competition is the ideology that pervades our society and distorts our thinking.”

Seven questions every business must answer to go from 0 to 1

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 (sales) 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?

Thiel on the Future of Innovation

Quotes

“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.”

“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.”

“A great business is defined by it’s ability to generate cash flows in the future.”

“Indefinite attitudes to the future explain what’s most dysfunctional in our world today. Process trumps substances: when people lack concrete plans to carry out, they use formal rules to assemble a portfolio of various options.”

“Brilliant thinking is rare, but courage is in even shorter supply than genius.”

“A startup is the largest endeavour over which you can have definite mastery. You can have agency not just over your own life, but over a small and important part of the world. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.”

“Once you think that you’re playing the lottery, you’ve already psychologically prepared yourself to lose.”

“No company has a culture; every company is a culture.”

“The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom.”

“Everyone at your company should be different in the same way – a tribe of like-minded people fiercely devoted to the company’s mission.”

Links

Peter Thiel Wikipedia

Zero to One Book

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Anesh Kalan is a M.Sc. Information Technology student at the University of Cape Town.

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