Lessons, Questions, and My Five (Ok – Six) Takeaways from Zero to One by Peter Thiel


Zero-to-One-book-cover-200x300I presented my synopsis of Zero to One on Friday at our Monthly First Friday Book Synopsis. Written by Peter Thiel (with Blake Masters), it captures Mr. Thiel’s challenging thinking,

In the book, he states his purpose:

Zero to One is about how to build companies that create new things. 
This book offers no formula for success… such a formula cannot exist, because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative.

• He shares these four critical “way to think” lessons:

  • It is better to risk boldness than triviality.
  • A bad plan is better than no plan.

  • Competitive markets destroy profits.

  • Sales matters just as much as product

• Here are some additional lessons and reminders that I encountered as I worked through the book:

  • Monopoly trumps competition — Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding. Proprietary technology is the most substantive advantage a company can have because it makes your product difficult or impossible to replicate.
As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage.
  • “Definitely Optimistic” is the only philosophy that can build the better future — “Definitely Optimistic,” not “indefinitely optimistic”
  • Design trumps chance
  • Look for secrets – there are still secrets out there!
  • Sales matters!
  • Recognize and Embrace the power of the founder
  • Follow this/aim for this: Start small – move to adjacent markets — e.g., Amazon & PayPal

• Here are seven business Questions to ask, and answer:

   1) The Engineering Question — Can you create breakthrough technology instead of incremental improvements?
   2)  The Timing Question — Is now the right time to start your particular business?
   3)  The Monopoly Question — Are you starting with a big share of a small market?
   4)  The People Question — Do you have the right team?
   5)  The Distribution Question — Do you have a way to not just create but deliver your product?
   6)  The Durability Question — Will your market position be defensible 10 and 20 years into the future?
   7)  The Secret Question — Have you identified a unique opportunity that others don’t see?

• And I ended my presentation with these Five Six Takeaways:

   1)  Ultimately, competition leads to very little in “profits.” The path to real profit is found in monopolies.
   2)  Look for secrets. And, be “definitely optimistic” – In other words, find a secret, and build a successful future.
   3)  This is modeled by Peter Thiel — read widely; really widely. It will help you think about connections and lessons that 
you will miss otherwise.
   4)  Start small, then scale. Don’t try to start big. If you do, the big companies already have you beat…
   5)  Since startups create the future, whatever you do, learn to think like and act like a startup.
   6) And…  don’t forget that sales matters.

———————

My synopsis, with my comprehensive, multi-page handout, and the audio recording of my presentation, will be available soon on our companion web site, 15minutebusinessbooks.com.

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