Zero to One by Peter Thiel

Is this a self help book? Or is this a book of advice which says it’s not giving advice? Most of the ideas in here are not groundbreaking, and – in most of the narratives – it feels like Thiel has the benefit of hindsight when describing why certain people and companies succeeded. Overall, he does keep driving one main point home. Competition is bad.

1) What important truth do very few people agree with you on?

My friend once asked me this. And I didn’t have to think much before giving him an answer. That truth is only what most people believe. Or, along similar lines, that science is a religion. Thiel’s answer is that the future of the world will be defined by technology, not globalization. He defines globalization and technology as orthogonal (horizontal and vertical). I’ve never thought about it like that. Whether or not it’s accurate depends on how you define these terms. Thiel almost defines globalization as one country copying another. In that case, I guess he’s right.

2) Competitive firms brand themselves as intersections. Monopolies brand themselves as unions.

I’m special because I serve British food AND I’m a restaurant AND I’m in Palo Alto. I’m not special because I’m a search engine AND I sell mobile phones AND I sell wearables.

3) Don’t disrupt.

YES. Disrupt is probably my least favorite buzzword. It has a negative connotation for both the “disrupter” and the “disruptee”. Why do you have to frame yourself as this rebel causing trouble? If your product and your business model are good, you’ll succeed. You don’t need to disrupt.

4) Matrix of Definite/Indefinite Optimism/Pessimism

D,O: US in 1950s

I,O: US now

D,P: China

I,P: Europe

This highlights one of the most distinctively American traits. It doesn’t matter how great or terrible it seems, Americans think they will win. I also agree with the whole matrix. A 2 by 2 is a very effective tool to analyze a situation and present it in an understandable way. I’ll never forget the ones I made to describe the sequester and the selfie.

5) The power of the power law.

This claim is similar to those about the flaw of averages. It’s a common mistake for people not to realize how important the outliers are. Thiel says that the best VCs only invest in a few companies. He also says that certain distribution strategies are exponentially more effective than others, depending on the company.

6) Igor is a fraud detection software used in Paypal.

Igor spawned the idea of Palantir. I’ve always wondered what Paypal and Palantir had in common.

7) Netflix has great PR.

Besides consuming billions of hours of free time and creating money out of thin air for early investors, Netflix has also managed to make an appearance in every article/essay/book that does a soft intro on machine learning. Were they even one of the first to use ML?

8) Your technology must be 10x better.

That’s why cleantech failed. And – in my opinion – why startups are hard.

9) 4 of 6 Paypal founders built bombs in HS.

Ok.

10) Scapegoats are the weakest but also the most powerful.

Because only they can solve the problem. Wow, that’s deep.

 

This book is a very quick read. Even though it’s a book on startups, it really shines not in telling you what you need to do to be a successful entrepreneur but in framing how the world functions and presenting an interesting perspective on why things are the way they are. In particular, his views on competition and monopolies and on the trend towards emphasizing luck are refreshing to read. Or even the title itself – Zero to One. Does a startup bring the world from 0 to 1, or from n to n+1 (for n>0)?