In this book Peter Theil insightfully describes the journey a start-up should undertake beginning with Zero. The Author mentions of the plagiarism that many entrepreneurs commit without discovering or innovating a new concept that delivers answers to the challenges at large. The book stems from a course about startups that Peter taught at Stanford in 2012. One of his student, Blake Masters took detailed class notes which circulated far beyond campus and subsequently Peter worked with Blake on Zero to One for the benefit of the wider audience. I gained hugely by reading the book and its concept. Let’s dwell into it right away.
1. Zero to One
Peter insists that the next Bill Gates will not built an operating system or the next Larry Page won’t make a search engine. The basic essence to the game of creating is not copying from the established players. Scaling up things that we already know takes the world from 1 to n. But every creation goes from Zero to One. Peter has brought to fore his experiences as a co-founder of Paypal and as an investor in many startups including Facebook and SpaceX to this book. He says he has found a powerful pattern that successful people adopt by finding value in unexpected places and think about business through principles rather than formulas.
2. Dynamism of New Monopolies
Peter Theil confirms with certainty why old monopolies never strangle innovation. With Apple’s iOS at the forefront, the rise of the mobile computing has dramatically reduced Microsoft’s decades-long operating system dominance. Before that IBM’s hardware monopoly of the ‘60s and ‘70s was overtaken by MS’s software technology. Peter indicates that the history of progress is the history of better monopoly businesses replacing incumbents. The books states that every new creation takes place far from the equilibrium and that every business is successful exactly to the extent that it does something others cannot. Therefore, Monopoly is not a pathology or an exception but the condition of every successful business
3. Last Mover Advantage
If you are the first in the market and capture significant market share while competitors scramble to get started, it is a tactic and not a goal. What really matter is generating cash flows in the future, so being the first mover doesn’t do you any good if someone else comes along and unseats you. All technology companies run into losses in their early years but it’s their future cash flows that enable them to keep proceeding further. It is much better to be the last mover as per Peter Theil and make the last great development in a specific market and enjoy years of monopoly profits.
“You must study the endgame before everything else”
Grand master Jose Raul Capablanca
4. Founding Moments
Peter says that only at the very start do you have the opportunity to set the rules that will align people towards the creation of value in the future. The most valuable company maintains an openness to invention that is most characteristic of beginnings.
“A startup messed up at its foundation cannot be fixed ”
Peter Theil
Peter mentions that Companies are like countries in a way. 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. It may take a crisis on the order of bankruptcy before anybody will even try to correct them
5. Everybody Sells
Everybody believes that we make up our own mind on the product to be purchased and that sales doesn’t work on us. But it’s not true. Peter states that no matter how strong the product is and even if it easily fits into the already established habits, you must still have a powerful distribution plan. Everybody has a product to sell whether you’re an employee, a founder or an investor. Look around, if you don’t see any sales people, you are the sales person.
This is the core message I received from the book Zero to One by Peter Theil. It is a great book and I strongly recommend you to read it.
Thanks for reading.
