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Highlights & Quotes: Zero to One (Peter Thiel)

posted Sep 7, 2015, 7:43 PM by Sami Lehtinen   [ updated Sep 7, 2015, 7:44 PM ]
eSome highlights which I made reading the book. It's recommended to buy the book, because many of the quotes are out of context.
Zero to One (Peter Thiel):
Startups operate on the principle that you need to work with other people to get stuff done, but you also need to stay small enough so that you actually can.
Because that is what a startup has to do: question received ideas and rethink business from scratch.
The internet had yet to take off, partly because its commercial use was restricted until late 1992 and partly due to the lack of user-friendly web browsers.
“irrational exuberance”
At least PayPal had a suitably grand mission—the kind that post-bubble skeptics would later describe as grandiose: we wanted to create a new internet currency to replace the U.S. dollar.
1. Make incremental advances
2. Stay lean and flexible
3. Improve on the competition
4. Focus on product, not sales
1. It is better to risk boldness than triviality. 2. A bad plan is better than no plan. 3. Competitive markets destroy profits. 4. Sales matters just as much as product.
It’s possible to question whether anyone should really be awarded a legally enforceable monopoly simply for having been the first to think of something like a mobile software design.
All failed companies are the same: they failed to escape competition.
Winning is better than losing, but everybody loses when the war isn’t one worth fighting.
If you can’t beat a rival, it may be better to merge.
business is defined by its ability to generate cash flows in the future.
Most of a tech company’s value will come at least 10 to 15 years in the future.
you should be asking: will this business still be around a decade from now?
Proprietary technology is the most substantive advantage a company can have because it makes your product difficult or impossible to replicate.
BUILDING A MONOPOLY Brand, scale, network effects, and technology in some combination define a monopoly; but to get them to work, you need to choose your market carefully and expand deliberately.
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
don’t disrupt: avoid competition as much as possible.
“ ‘Success is never accidental,’
the myth of the self-made businessman,
What do they do with the money? In a financialized world, it unfolds like this: • The founders don’t know what to do with it, so they give it to a large bank. • The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors. • Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks. • Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats. At no point does anyone in the chain know what to do with money in the real economy.
Eroom’s law—that’s
Moore’s law
that the number of new drugs approved per billion dollars spent on R&D has halved every nine years since 1950.
Indefinite pessimism works because it’s self-fulfilling: if you’re a slacker with low expectations, they’ll probably be
“lean startup”
“minimum viable product,”
intelligent design works best.
You are not a lottery ticket.
You should focus relentlessly on something you’re good at doing, but before that you must think hard about whether it will be valuable in the future.
what valuable company is nobody building?
A company does better the less it pays the CEO—that’s one of the single clearest patterns I’ve noticed from investing in hundreds of startups.
Recruiting is a core competency for any company. It should never be outsourced.
1. The Engineering Question
2. The Timing Question
3. The Monopoly Question
4. The People Question
5. The Distribution Question
6. The Durability Question
7. The Secret Question
10x, improvements.
what will the world look like 10 and 20 years from now, and how will my business fit in?