Zero to One by Peter Thiel (Book Summary)

‘Zero to one’ refers to disruptive ideas – taking a business from nothing to something – as opposed to ‘one to n’ which represents incremental innovation.

Before going into detail, my key takeaways were:

1. Don’t do what other people are doing. Don’t do the opposite of what other people are doing. Do something completely different and 10x better that exploits a secret of nature or a secret about people. Formulate a plan that begins with dominating a niche then scales in a controlled manner.
2. Make every person in a company responsible for doing one distinct thing.
3. Selling your company to the media is a necessary part of selling it to everyone else.

Zero to One Ideas

• The most contrarian thing of all is not to oppose the crowd but to think for yourself.
• Don’t build an undifferentiated commodity business
• Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding.
• A good startup should have the potential for great scale built into its first design.
• Only when your product is 10x better can you offer the customer transparent superiority.
• It’s easier to dominate a small market than a large one. If you think your initial market might be too big, it almost certainly is.
• Don’t disrupt: avoid competition as much as possible
• There are two kinds of secrets: secrets of nature and secrets about people.
• Entering a slow-moving market can be a good strategy, but only if you have a definite and realistic plan to take it over.
• Plan in detail.
• Great companies have secrets: specific reasons for success that other people don’t see.
• The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.

Team Building

• WHENEVER I INTERVIEW someone for a job, I like to ask this question: “What important truth do very few people agree with you on?”
• Bad decisions made early on—if you choose the wrong partners or hire the wrong people, for example—are very hard to correct after they are made.
• Founders should share a prehistory before they start a company together—otherwise they’re just rolling dice.
• A board of three is ideal. Your board should never exceed five people, unless your company is publicly held.
• … hiring consultants doesn’t work. Part-time employees don’t work. Even working remotely should be avoided, because misalignment can creep in whenever colleagues aren’t together full-time, in the same place, every day.
• Recruiting is a core competency for any company. It should never be outsourced.
• Above all, don’t fight the perk war.
• The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing… Most fights inside a company happen when colleagues compete for the same responsibilities.
• It’s more powerful but at the same time more dangerous for a company to be led by a distinctive individual instead of an interchangeable manager
• The lesson for business is that we need founders. If anything, we should be more tolerant of founders who seem strange or extreme; we need unusual individuals to lead companies beyond mere incrementalism.

Selling and distribution

• Like acting, sales works best when hidden.
• Whatever the career, sales ability distinguishes superstars from also-rans.
• Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true.
• Once you have a pool of reference customers who are successfully using your product, then you can begin the long and methodical work of hustling toward ever bigger deals.
• The kitchen sink approach—employ a few salespeople, place some magazine ads, and try to add some kind of viral functionality to the product as an afterthought—doesn’t work.
• Selling your company to the media is a necessary part of selling it to everyone else.
• Selling and delivering a product is at least as important as the product itself.
• Most companies underestimate distribution, but Tesla took it so seriously that it decided to own the entire distribution chain.