Short Review
Zero to One is a book written by Peter Thiel based on his classes on Stanford University on start-ups. It has become one of the classic books on start-ups.
The concept of Zero to One is a differentiation from the regular entrepreneurs. A start-up when viewed by Peter Thiel is focused on the creation of something new. Massifying is not something central in start-ups its based-on building something unseen.
I loved how chapter one starts. Thiel says that when he interviews someone new he asks the following question:
What important truth do very few people agree with you on?
I have been meditating on this question for the last couple of weeks. The answer as Thiel points out, is not taking a side on a common discussion, but to really state the answer as:
“Most people think A but actually I’m convinced they are wrong, and B is correct”
That’s thinking different as Apple would have said in 1997.
Thiel then continues his lectures talking on local monopolies and the economics of start-ups. He pleads the case of striving for small monopolies. This theory is not something new and a common topic in microeconomics of local monopolies. Start-ups aspire to conquer a small market first to then continue growth on the rest of the market, adapting their capacities and work to do this.
The book then continues with a lot of themes based on the creation and growth of start-ups including their corporate governance, size, founders, and an interesting critique on education.
What caught my eye to read this book?
I had heard of this book several times and had it on my must-read books for 2021 (I had planned to read it further ahead but plans change). Thiel is one of the members of the Paypal Mafia. I ended 2020 reading several books on entrepreneurship, a common step is to watch the most successful companies of the last 20-30 years, so I ended up diving into start-ups and digital companies.
Highlighted Quotes
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.1
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.2
Every high school course period lasts 45 minutes whatever the subject. Every student proceeds at a similar pace. At college, model students obsessively hedge their futures by assembling a suite of exotic and minor skills. Every university believes in “excellence,” and hundred-page course catalogs arranged alphabetically according to arbitrary departments of knowledge seem designed to reassure you that “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.3
“Thiel’s law”: a startup messed up at its foundation cannot be fixed.4
This philanthropic approach to business starts with the idea that corporations and nonprofits have until now been polar opposites: corporations have great power, but they’re shackled to the profit motive; nonprofits pursue the public interest, but they’re weak players in the wider economy. Social entrepreneurs aim to combine the best of both worlds and “do well by doing good.” Usually they end up doing neither.5
Random Thoughts while reading this book
I learned a lot with this book and had a lot of fun with the topics despite not going too deeply in them. Every thing written may not be particularly new (but what is?), but he’s storytelling on start-ups and their characteristics is interesting.
I took a lot of notes while reading this book, found it remarkably interesting and if building a company can be useful. It will help to keep the mind of the founders grounded and work on creating something new. Despite that, I couldn’t find a groundbreaking idea that I could talk on and on about.
Coincidentally, I was reading Zero to One when Ryan Holiday posted on his Instagram quotes from Zero to One. He quoted the following:
“Competition is for losers.” Go make your own thing.
Thiel, Peter; Masters, Blake. Zero to One (p. 10). Crown. Kindle Edition.
Ibid (p. 54)
Ibid (p. 91)
Ibid (p. 107)
Ibid (p. 165)