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ybrikman

ybrikman

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

Zero to One: Notes on Startups, or How to Build the Future - Peter Thiel, Blake Masters This book fluctuates between brilliance and madness. When it focuses on the mechanics of start ups, it's great. When it focuses on Thiel's philosophies, it's a bit whacky. Thiel enjoys being a contrarian too much. Doing something new and valuable may require being a contrarian, but just being contrarian doesn't mean your ideas are new and valuable. Worth reading if you're interested in startups, but be prepared to skim and shake your head.

Pros:

* Great chapters on how to build a monopoly, approach markets, luck, hiring, culture, and sales.

* lots of contrarian views that will force you to reconsider your own ideas

* Interesting outlook on the future of technology and humanity

* Clear writing

Cons:

* The ideas of vertical vs horizontal progress is nonsense. All ideas are horizontal, built incrementally on top of all the ideas that came before by people who came along at the right time and place. This includes the ideas behind paypal and palantir.

* Limited perspective on competition. It exists. It leads to better products for consumers. It hurts some businesses, but drives others to greatness.

* I disagree with Thiel's negative view of education. Yes, higher ed is too expensive and can be done better, but that's not the same as eliminating it. And if you want to change it, then have your companies stop filtering candidates by college degree.

* Dismissing a broad curriculum and saying everyone should study just one thing is absurd coming from a lawyer turned businessman who likes to quote a very wide array of human knowledge, including philosophy, history, physics, mathematics, medicine, economics, and mythology. It's also absurd since the fusion of ideas from different disciplines is what leads to much of innovation.

* Comparing hipsters to the uni bomber? Really?

Fun quotes:

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. Anything less than an order of magnitude better will probably be perceived as a marginal improvement and will be hard to sell, especially in an already crowded market.

By the time a student gets to college, he’s spent a decade curating a bewilderingly diverse résumé to prepare for a completely unknowable future. Come what may, he’s ready—for nothing in particular.

But leanness is a methodology, not a goal. Making small changes to things that already exist might lead you to a local maximum, but it won’t help you find the global maximum. You could build the best version of an app that lets people order toilet paper from their iPhone. But iteration without a bold plan won’t take you from 0 to 1. A company is the strangest place of all for an indefinite optimist: why should you expect your own business to succeed without a plan to make it happen? Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best.

As globalization advances, people perceive the world as one homogeneous, highly competitive marketplace: the world is “flat.” Given that assumption, anyone who might have had the ambition to look for a secret will first ask himself: if it were possible to discover something new, wouldn’t someone from the faceless global talent pool of smarter and more creative people have found it already? This voice of doubt can dissuade people from even starting to look for secrets in a world that seems too big a place for any individual to contribute something unique.

The best entrepreneurs know this: every great business is built around a secret that’s hidden from the outside. A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator.

Every great company is unique, but there are a few things that every business must get right at the beginning. I stress this so often that friends have teasingly nicknamed it “Thiel’s law”: a startup messed up at its foundation cannot be fixed.

You can’t accomplish anything meaningful by hiring an interior decorator to beautify your office, a “human resources” consultant to fix your policies, or a branding specialist to hone your buzzwords. “Company culture” doesn’t exist apart from the company itself: no company has a culture; every company is a culture. A startup is a team of people on a mission, and a good culture is just what that looks like on the inside.

All salesmen are actors: their priority is persuasion, not sincerity.

The most fundamental reason that even businesspeople underestimate the importance of sales is the systematic effort to hide it at every level of every field in a world secretly driven by it.

It’s better to think of distribution as something essential to the design of your product. If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business—no matter how good the product.

Tthe seven questions that every business must 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?