Zero to One: Notes on Startups, or How to Build the Future

Erik Book Review, Economics, Finance, and Markets, Thoughts of a Mastermind 2 Comments

It’s up to us. We cannot take for granted that the future will be better, and that means we need to work to create it today. – Peter Thiel

Zero to One: Notes on Startups, or How to Build the Future, by Peter Thiel, with Blake Masters, touches on the mindset required to create a thriving and successful business in the modern world. In addition to thoughts on the required mindset, he poses questions and criteria which are important for any founder to ask and examine as they decide to go into the harsh world of startups and business.

Peter Thiel co-founded PayPal and Palantir, and has made investments in other startups, such as Facebook, SpaceX, and LinkedIn. Given this first hand experience in working in and with startups, he created a class which he taught to Stanford students on startups; Zero to One is the book version of this class.

I was drawn to Zero to One for multiple reasons. First, I’m interested in creating a business in the near future. I’m not exactly sure what my product will be at this point, but I want to surround myself with the correct environment and knowledge so that when I do come up with a feasible idea, I can tackle it and make it work. Second, I’ve read Peter Thiel is a unique person; someone who challenges the status quo. This appeals to me as I try every day to challenge my thoughts on the world and become a more rounded and knowledgeable individual.

There are many meaningful insights Thiel has in Zero to One; I will go through three main points. First, it is extremely important for a person to think for themselves. What Thiel means is just because the crowd is going one way, that doesn’t mean you should blindly follow. Applying it to business and entrepreneurship, we should look to create something new and has value. You and I probably won’t create the next social media platform or a search engine to surpass Google. But, with an idea and excellent execution, we could create something on that scale.

Second, it is easier to dominate a smaller market than to try and squeeze 1% out of a large market. Essentially, the goal of a startup is to identify a niche space and look to dominate and monopolize that space. Google did it with search engines, Microsoft did it with the superior software, LinkedIn did it with a professional networking and recruiting website. If you can create an impactful product in a niche space, you can and will make money. This being said, Thiel does say that if we want to try to get into a big market is useless unless you have a product which is 10x better than the current products.

Third, we need to have definitive plans about our future. Wishy washy optimism is not going to bring us a wildly successful future; we need to be make definite plans about our future. This includes short term plans and also longer term plans. Thiel says this is something many Americans are doing and it’s leading to certain problems: many people have the mindset that the future will be better than the present, but we don’t know exactly how. By taking control of our futures, we can influence how it will be better.

With all books, it isn’t enough to just read the content; the actions which one takes after reading are extremely important for our growth. I want to focus on thinking of ideas of a product I could market in niche space. Also, I want to focus in on planning for the future. At the end of February, I will have my taxes finished and I will have received my bonus from work. At this point, I can more effectively forecast my cash position for the coming months and determine which investments or ideas would be feasible. Stay tuned for the coming posts!

Here are some other insightful notes, quotes, and thoughts I have from reading Zero to One:

  • Technology and machines shouldn’t be used to completely automate our jobs. We should use technology and machines to complement our work and make it more efficient. Future work will be highly dependent on human interactions with computers and analysis.
  • We need to be aware of the Power Law, i.e. the world is not “normally distributed” but has fat tails.
    • The investor returns for the best startup is usually greater than the sum of all the other startups in the same space.
  • Belief in secrets is an effective truth.
    • What do people not understand or know about and how can we benefit off of this?
  • A company does better the less it pays its CEO.
  • When trying to recruit people, we should ask this question to ourselves, “Why should someone work for you and your company? What sets you apart?” We should answer with the products we are building and the mission we are on.
  • We should look to monopolize a niche space versus trying to compete in a crowded space.
    • Competition wipes away all profits.
  • Superior sales and distribution by itself can create a monopoly, even with no product differentiation.
    • The converse is not true.
  • “The essential first step is to think for yourself. Only by seeing our world anew, as fresh and strange as it was to the ancients who saw it first, can we both re-create it and preserve it for the future.”

“The essential first step is to think for yourself. Only by seeing our world anew, as fresh and strange as it was to the ancients who saw it first, can we both re-create it and preserve it for the future.”

Zero to One is a must read for entrepreneurs and people who want to influence future events. The main topics in Zero to One are thinking for oneself and planning for the future. If this describes your mindset and your actions, then Zero to One can only be beneficial for your enjoyment and purpose. Zero to One is a solid complement to Originals (book review) and Think Like a Freak (book review). In those books, I was challenged to think in a different way: I learned to think originally and think creatively, it takes exposure to new ideas, challenging the default, and relentlessly trying to uncover secrets.

Would you ever start a company or a startup? What products would you be interested in selling? Do you look to create a better future for yourself?

As always, please suggest any books you have read which have been influential to your success!

Erik

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