Peter Theil
Peter Thiel co-founded PayPal and was an early investor in Facebook, SpaceX and LinkedIn. His book, Zero to One: Notes on Startups, or How to Build the Future, is a guide to “see beyond the tracks laid down” so that we may see the “broader future that there is to create.” Zero to one is code for making something from nothing. It is a treatise on innovation and contrarian thinking, something that is useful for investing and filling useful niches in society. Here are our takeaways:
1. Be contrarian – “The most contrarian thing of all is not to oppose the crowd but to think for yourself”. You can’t fake authenticity. Be willing to share your thoughts and feelings. Revolutionary breakthroughs appear obvious in hindsight, but are invisible to most; because it’s hard to ignore reality and imagine which does not yet exist.
2. Focus on strengths - Like the book, “First Break All The Rules: What the World’s Greatest Managers Do Differently”, Peter argues that we should relentlessly focus on our strengths. Do things that we are good at and that add value to the world.
3. Don’t copy the past - “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.”
4. There is no formula for innovation – Successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.
5. The first step to thinking clearly – “What important truth do very few people agree with you on? — is difficult to answer directly. It may be easier to start with a preliminary: what does everybody agree on? Conventional beliefs only ever come to appear arbitrary and wrong in retrospect; whenever one collapses we call the old belief a bubble, but the distortions caused by bubbles don’t disappear when they pop. The internet bubble of the ‘90s was the biggest of the last two decades, and the lessons learned afterward define and distort almost all thinking about technology today. The first step to thinking clearly is to question what we think we know about the past.”
7. Progress comes from monopoly, not competition. – “Monopolies allow wider latitude to care about its workers, its products and its impact on the wider world. Google’s motto—”Don’t be evil”—is in part a branding ploy, but it is also characteristic of a kind of business that is successful enough to take ethics seriously without jeopardizing its own existence. In business, money is either an important thing or it is everything. Monopolists can afford to think about things other than making money; non-monopolists can’t. In perfect competition, a business is so focused on today’s margins that it can’t possibly plan for a long-term future. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits.” "Competition can easily cloud us and cause us to lose sight of where we truly want to be and what we truly want to accomplish."
8. A successful creative monopoly needs: - 1. Proprietary technology that nobody else will be able to replicate; 2. Network effect (e.g. Facebook); 3. Economics of Scale (Twitter); 4. Branding (Apple). Peter also emphasizes to always start with dominating a small niche market, and then expand to adjacent markets.
9. Every potential founder should ask: "Is it really possible to do something that still has not been done? Is now the best time for this type of business? Will I be a big fish in a small pond or vice versa? Do I have the right people onboard and do I have the right channels for distributing the products? Have I identified the opportunity that nobody else has and will my job exist in the next ten or so years?"
10. If answers to questions every potential founders should ask (see above) are all yes, then start your business; else you should join a fast growing startup. Owning 0.01% of google is much better than owing 100% of majority of startups that failed. Ask yourself which start-up will be a superstar 10 years from now?
11. Globalization without technology will run into big problems. "Globalization is for a horizontal future. China has been coping everything that works from US and other developed countries. Many emerging countries could do that too. However, globalization without technology will run into big problems, such as water and air pollution, if we use current energy system to power the world. We need to create new ways of doing things, so globalization does not destroy the planet."
Comments