Zero to One (10/10)4 min read

10/10

Create something new, don’t go from 1 to 2, or 895 to 896, go from 0 to 1.

A great company is a conspiracy to change the world.

Peter Thiel

What I love about Zero to One, is that Peter Thiel has an opinion, he is polarizing. At one point even arguing that Malcolm Gladwell’s ideas of “chance” are misguided; Mr. Thiel points to billion-dollar companies that were started at different times by the same person (Steve Jobs, Elon Musk) as evidence. Throughout the book, he applies what he learned throughout his career (starting Paypal, investing in Facebook to name a few) to every startup lesson he teaches us.

I read this book in one day across ~3 hours and I already know I will be referencing it for advice, and reminders, as I grow.

So What Did I Learn?

• It is better to be bold than trivial
• A bad plan is better than no plan
• A competitive market is not good for profits
• Be Different
• Don’t succumb to measuring everything (website/youtube analytics, weekly active users, monthly revenue, etc.)
• Build a business or product that will survive and be relevant in 10 years
• If you aren’t new you need to be at least 10 x better
• Start very niche then gradually expand into related and slightly broader markets (like amazon who began with books then began shipping everything).
• You are not special, thinks won’t magically work out, you need a plan, you need to think big, you need to be different.
• How to identify a good startup to invest in
  • Make sure the founding team members are friendly and like each other.
  • The less the company pays the CEO the better, an early-stage, venture-backed startup CEO that receives more than $150,000 per year in salary will most likely not succeed.
  • Whoever is selling the tech company to you should be wearing a t-shirt, not a suit.
• From the outside, everyone in your company should be the same, from the inside every individual should be sharply different based on their work.

7 Questions Every Successful Business Answers

I also include Tesla’s answer to these questions (7 for 7), from the book.

1. Engineering: Can you create breakthrough technology instead of incremental improvements?
   1. Tesla has technology that is so good, that other car companies buy their car parts from Tesla (Honda, Ford, etc.).
2. Timing: Is now the right time to start your particular business?
   1. In January 2010, when the Obama administration emphasized renewable energy, Tesla secured a $465 million loan from the U.S. Department of energy. That would not happen today.
3. Monopoly: Are you starting with a big share of a small market?
   1. Tesla began with a tiny market, the Roadster in 2008 only sold 3,000 cars. They began as, really, the only electronic car company in the US.
4. People: Do you have the right team?
   1. Elon Musk is a smart technical guy and businessman, he describes his team, “If you’re at Tesla, you’re choosing to be at the equivalent of Special Forces. There’s a regular army, and that’s fine, but if you are working at Tesla, you’re choosing to step up your game.”
5. Distribution: Do you have a way to not just create but deliver your product?
   1. Tesla started their own distribution chain. Unlike other car companies tesla’s cells it’s cars at its own dealership. They don’t depend on independent dealerships to give the “tesla” experience. The cost higher, but the reward is greater, and saves the company money in the long term.
6. Durability: Will your market position be defensible 10 and 20 years into the future?
   1. It seems cars will be essential in the foreseeable future, and electronic cars even more so. Also, unlike every other car company, the founder of Tesla is still in charge.
7. Secret: Have you identified a unique opportunity that others don’t see?
   1. Tesla makes cars that look cool and also lets people appear to be participating in “cleantech.” Tesla has a unique brand that is multiplied by the social phenomenon of environmental awareness.

So I suggest reading this book, learn from the founder that has driven the creation of multiple multi-billion dollar companies. If he was guiding you on starting a company these would be his “do’s and don’ts.”

-Zach

Quotes I Like

• Our task today is to find a singular ways to create the new things that will make the future not just different, but better – to go from 0 to 1. The essential first step is to think for yourself.
• If you lose sight of competitive reality and focus on trivial differentiating factors – maybe you think your naan is superior because of your great-grandmother’s recipe – your business is unlikely to survive.
• 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.
• Elite Students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them.
• 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.
• If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.