TLDR; A non-fiction book you can’t put down. And that’s saying something. Beyond the crisp and concise theories on innovation and startup ecosystem, the unique writing style incorporating Mark Twain, Tolstoy, and even Shakespeare into the tech world makes Zero to One an easy and fascinating read.

Unlike several other non-fiction books, Zero to One does not beat around the bush or repeat ideas just to fill the pages. It gives a detailed yet straightforward checklist to nurture innovation and build successful ventures, with interesting observations like how successful salespersons don’t necessarily look like salespersons.

A wonderful read for anyone interested in technology, startups, and business.

For the future: Thiel makes some interesting observations about how we are not bound by our circumstances, with references to Malcolm Gladwell‘s philosophy. I added Outliers to my soon-to-read list right after finishing Zero to One to compare and contrast the theories. Coincidentally, Indra Nooyi‘s autobiography, ‘My life in full‘ was released in the same week. I jumped right on to read that as knowing the story of a woman from 20th century India reaching the heights of corporate America could shed light on the right balance of circumstance and talent. A book review for ‘My Life in Full’ will be coming soon.

Notes/Summary

Note: Opinions reflect that of the author of Zero to One, Peter Thiel, except for my personal comments in between – marked as ‘My note‘.

Globalization vs Technology

The future could be a world where we replicate everything that already exists or a place where we innovate and create things that were never done before – the ‘zero to one’ journey.

Globalization is unsustainable as every country’s need for resources will keep increasing until we reach a plateau if the technological advancements don’t catch up or lead the journey. The challenge is to find the key ideas that would take us from zero to one instead of replicating 1 to n.

A startup is the largest group of people you can convince of this idea and get things done. They are the best way to make technological leaps.

Tech bubble and making sensible companies

The value of a company is not a measure of the present, it is a measure of what it will be worth x years down the lane. Hence the question of ‘what valuable company is no one building’ is not about replicating x for y in today’s world, it’s about coming up with a z that will be of tremendous value in the future.

My note: An example would be companies like CRED who have created a space for themselves by entering the luxury segment. The necessity was not widespread or popularly known. But it is niche and makes economic sense.

Competition vs monopoly

What innovators often forget is the challenge of competition vs monopoly. Competition is ingrained in us from childhood. In the long term, only monopolies survive. Competitive businesses try to portray themselves as monopolies and vice versa for totally different concerns. Nevertheless, being a monopoly is to get the lion’s share, and then some, in any business. And to be a monopoly, you need to qualify for a seat at the table.

A monopoly would have proprietary tech – not just IT, anything could be tech – which is 10x better than the closest neighbor – almost a new invention. Once the tech is available, use the network to grow from a niche starting point. Scalability is easy for tech ventures because of averaging out of cost, especially in SaaS, not so much for manufacturing. Branding can be powerful.

Competitive markets squeeze the profit out of each others’ hands and into no one’s pockets. Monopolies skip the competition step and end up luxurious enough to spend time and effort on other things like research and innovation and culture. Monopolies aren’t evil. They can be thrown away by new tech and innovation. As long as we are open to competition to become the monopoly, all is fair. Equilibrium is death.

Steps:

• Start small and monopolize – dominate the smaller market – existing market, concentrated people, no competitors 
• Scale-up
• Don’t disrupt – avoid competition
• Be the last mover who moves monopolizes and unseats

You are not a lottery ticket

Future should hold definite optimism – belief that we can do something about the world and doing that would make the world a better place. Indefinite optimism could lead to only dreams and no actions (just 1 to n) and pessimistic thoughts would lead to silos of waiting for the death bed. Other domains like politics and philosophy are resistant to change, but tech isn’t.

The power law in VC

VC investments need to be in the 20% startups that can create the most value (Pareto principle). Diversifying investments often kill the profits. The catch is that at an early stage it’s difficult to identify which ventures fall into the 20%. The differences hide in plain sight and are difficult to spot. Focus on what you’re good at and is valuable.

Finding the hard problems

Every company has its secrets. There are hard problems yet to be solved- this belief can take you from 0 to 1. If we think all solvable problems have already been solved, and only impossible problems are left, then there is nothing worth spending time on. Spend time looking for secrets about nature or secrets about people. What is forbidden? What is no one looking for?

The founding blocks

• Tell the secret only to as many people as needed – your company.
• Take care of the organization’s foundation – find the right founders with good history. Don’t leave it to chance.
• Outline who has ownership, possession, and control. CEO should take low pay. Keep all allocations secret and give a piece of the future to people through equity.
• The power of creation and the synergy, if it can be kept alive, is the best food.

Company culture

Company culture, even if called mafia, helps create a unified mission (My note: To read – Brotopia). People should be close-knit, not necessarily most talented. Must be able to say why you are the best fit for them personally. Silicon valley hoodies are a uniform of oneness and shared beliefs. Better to be a cult than a consultant.

Importance of sales

Sales is hidden. Technical people underestimate sales and think they are immune because sales is that good at being camouflaged. Do not perceive sales as dishonest. Depending on the product, sales and distribution could play varied roles but is always essential.

Luxury products might need the CEO to make the sale whereas FMCG can stick to mass advertisement because profit per customer over a lifetime should be aligned with the acquisition cost of each customer. Viral marketing like people inviting each other works in the middle ground. Sales shouldn’t be only to customers, but to employees and investors too.

AI and humans

Empower people rather than make them obsolete. AI that can do what humans can do is cool tech but not of real value. AI that can complement what humans can’t do is where the real value lies – Eg. Palantir.

Niche is always good

Tesla got green-tech right by using superior-tech, making use of govt subsidies, being a monopoly in a niche of luxury race cars and expanding, good dealerships and innovation with a secret ingredient – fashion. It’s a strategy game.

Strong leaders and innovation

Founders are often eccentric, although the direction of causation which is unclear. Strong leaders and their organizations resemble monarchies, and it’s good as long as the monarch doesn’t go crazy. Continued innovation is necessary to ensure progress and if possible, singularity.

– Review of Zero to One. Find the book here.