Zero to One by Peter Theil

(3 customer reviews)


If you want to build a better future, you must believe in secrets.

The great secret of our time is that there are still uncharted frontiers to explore and new inventions to create. In Zero to One, legendary entrepreneur and investor Peter Thiel shows how we can find singular ways to create those new things.

Thiel begins with the contrarian premise that we live in an age of technological stagnation, even if we’re too distracted by shiny mobile devices to notice. Information technology has improved rapidly, but there is no reason why progress should be limited to computers or Silicon Valley. Progress can be achieved in any industry or area of business. It comes from the most important skill that every leader must master: learning to think for yourself.

Doing what someone else already knows how to do takes the world from 1 to n, adding more of something familiar. But when you do something new, you go from 0 to 1. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. Tomorrow’s champions will not win by competing ruthlessly in today’s marketplace. They will escape competition altogether, because their businesses will be unique.

Zero to One presents at once an optimistic view of the future of progress in America and a new way of thinking about innovation: it starts by learning to ask the questions that lead you to find value in unexpected places.

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Peter Theil

195 pages

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3 reviews for Zero to One by Peter Theil

    Wasim Khan
    June 22, 2020
    This is a great book. Peter Thiel is a serial entrepreneur. He was the founder of PayPal. He was an early investor of facebook. He is also on the board of facebook. He shares his experiences and ideas that are very valuable for people who are in search of some help to build a company with the right mindset. I am satisfied with the delivery of BukhariBooks. It was delivered in 1/2 days and the quality was also very good.
    January 12, 2020
    Sindy Li I heard about this book when it came out and thought that there was no way I would read a book on startups. Not that I don't see great things coming out of some startups, but I am not the only one who has developed a fatigue of the many random startups founded by fellow Silicon Valley dwellers who are engineers, MBAs, or a little bit of both, and of the many other Valley dwellers who claim they want to do a startup without knowing what it will be about! After my dad bought a copy in Taipei I decided to take a look. I ended up enjoying it much more than I expected. This is a book of solid, sensible advice on startups, coming from economic principles and common sense. (I have no experience and little knowledge of startups, so I am merely speaking from an economist's perspective.) I wouldn't generalize Thiel's wisdom to fields outside of startups (just like the case with Paul Graham) -- indeed he made some claims that were not well thought out -- but the main points of the book were valuable. I would recommend it especially to those currently or thinking of working in a startup, and hopefully this will lead to less and on average better startups being founded. Below are a few ideas I liked from the book. They are not necessarily original but are pretty good. Note that I read the Chinese version and translated the phrases back into English so they are probably different from the book. Chapter 1: The difference between horizontal progress/globalization and vertical progress/technological innovation. The latter is needed to solve problems challenging our future. (However the former is not trivial!) Chapter 3: Innovation and unique technology that the market demands give you profitable monopoly power. Usually economists talk about some extent of monopoly power (e.g. patents) encourages innovation, but Thiel was looking at it from another perspective: that of an entrepreneur choosing which type of business to start. His answer is to choose one that makes differentiated products (that the market demands) and gives you monopoly power. Chapter 4: Again, competition vs. monopoly. Traditional businesses provide similar products and compete by cutting prices/costs, advertising etc.; innovative businesses make products that no one else makes. Chapter 5: What are the features of a business that can create and sustain monopoly power, growth and cash flow? 1. Unique technology (at least 10 times better than the existing alternative--otherwise it won't be noticed--or entirely new products). 2. Network externality. 3. Economies of scale. 4. Brand. How to create one? Start by monopolizing a small market (that needs to actually exist, unlike the market of British food in Palo Alto) through winning the most important group of users in this market, then expand in size or variety (i.e. into related markets). Don't focus on DISRUPTION; make the pie bigger instead of playing a zero sum game. Chapter 6: Have a purpose, a vision and long-run planning, instead of a lean startup and minimum viable product to be driven by whatever comes up on the way. This idea is related to the one on an "authoritarian" business presented in the last chapter. (The philosophical discussion in this chapter is not particularly great.) Chapter 7: Power law. As a venture capitalist, don't simply pursue diversification; choose a few businesses to invest in and choose them carefully so all of them have great (expected) potential. (Wait, did anyone derive optimal investment rules under power law distribution?) Chapter 8: (I like this one a lot.) All great business have "secrets". A world without secrets is boring, stagnated and has no room to improve upon. Our world is full of injustice and inefficiency, so it cannot be one without secrets. What prevent us from exploring these secrets are gradualism, risk aversion, inertia and belief in equilibrium ("flatness" or perfect efficiency of markets). Only those who see secrets can grasp hidden opportunities, lead to Scientific Revolutions and found businesses like Airbnb, Uber, Lyft etc. How to find secrets? Look where no one else does; choose the path less traveled. That's why it's (kinda) important to have contrarian views. (Though I think it's more important to be thinking than to have contrarian views for the sake of it. Thiel seems to agree by saying, at the end of Chapter 2, that the most unique way is not to be different from everyone else but to think for yourself.) Chapter 9: According to power law, there are a few things that are crucial to the entire business, e.g. its foundations. Make sure you choose founding partners who are really passionate about the business and you enjoy working together. (Stuff on the size of the board, stock as incentives etc.) You are not only trying to create new things at the founding stage of a startup; if you are successful, you should have created a business that stays creative. Chapter 10: The company doesn't attract employees (or create a "culture") by providing benefits like free food, free laundry etc. It should attract employees by what it does and who the team are. A company should be its own culture. It should be like a cult (rather than a consulting firm with no loyalty or identity), but one that is not extreme. (In Chapter 8, the HP example shows that once a company is managed in the conservative "MBA" way to optimize for bureaucratic functioning, innovation dies.) Chapter 11: Marketing is important. Marketing influences everyone, especially those who think they are not influenced. The best marketer doesn't look like one. Different ways of marketing, from viral marketing to complex sales. Make sure you have a viable marketing strategy for your product. It's great if your customers can market for you, e.g. through network externality (like PayPal). Chapter 12: Humans and computers should be complements (e.g. PayPal fraud detection, Palantir helping intelligence experts) rather than substitutes. (Great idea, and makes sense in some way--there are things that one is good at while the other is not--but in practice they are also substitutes in many ways which have unfortunate implications for employment.) Chapter 13: The failure of most clean technology firms was a business rather than political one. How Tesla succeeded while many others failed on 7 dimensions: engineering, timing, monopoly, personnel, marketing, sustainability, secrets. The fallacy of social entrepreneurship. (I think businesses that generate positive externalities are great but I agree that they must be self-sustaining and that being a "social enterprise" shouldn't be an excuse to not pursue commercial viability.) Chapter 14: Many (tech) entrepreneurs are "weird". Innovative tech companies are usually authoritarian with charismatic leaders like Steve Jobs. Society should be more tolerant of seemingly weird or extreme entrepreneurs, because we ned extraordinary people to lead companies in order to avoid the slow progress of gradualism. However, GLADLY, Thiel also advises such leaders to remain cautious, not to over estimate their power or become "prime movers" of Ayn Rand who do not realize that their success relies on other people. Lastly, I noticed one thing: most women who showed up in illustrations were (at least) half naked (model with Richard Branson, Britney Spears, Lady Gaga etc.). It's true that female entertainment celebrities usually appear with much less clothes than male ones, but having such pictures in a book on startups was quite annoying for a female reader, and probably distracting for a male one. Peter Thiel has just revealed another problem of Silicon Valley--sexism--in his book, except this time he did it not by words, but by action.
    January 12, 2020
    Jacek Ambrzik I thoroughly enjoyed the book even if I have found myself in violent disagreement with many of its thoughts. The book opens up with these words. "Every moment in business happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them. It’s easier to copy a model than to make something new: doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1. The act of creation is singular, as is the moment of creation, and the result is something fresh and strange." Initially, I kind of liked this quote. It is indeed hard to imagine a new business to threaten the dominance of Google Search or Facebook's social network. But the fact that Google search dominates is not really a zero-to-one effect, but a decisive improvement over previously existing internet search engines. Facebook was not originally conceived of as a dominant social platform; it so happened that it turned out to be well liked by millions of people beyond the original community of Harvard students. In operating systems we already have Linux and Android (using Linux) which have way more deployments than Windows. So it is not the case that "every moment in business" happens only once, unless in a very literal sense. Peter discusses "copying" with disdain, but not all "copying" is just copying, a lot of progress happens via semi-continuous improvements. This civilization does not only progress by one-off disruptive inventions. A lot of it is steady improvements. And these improvements occasionally lead to enabling zero-to-one (or dominating) developments. Peter asks "What company is nobody building?" Like the previous quote, this question has some charm, but I think it too is misleading. Well, maybe nobody is building this "company X" yet, because it is not yet fully enabled. Eg. voice over internet existed in the lab (IBM?) since mid 70's, but Skype made sense only much later when lots of people got access to personal computers and these computers started being connected to the Net all the time. Bottom line: it is not all "zero to one", nor it can be or should be. I still give the book 5 stars as I enjoyed its thought provoking character; it was an engaging reading: disagreeing, agreeing, learning new perspectives. Highly recommended but please don't treat it as Gospel :-)
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