Top highlights from Zero to One
ZERO TO ONE EVERY MOMENT IN BUSINESS happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin wont make a search engine. And the next Mark Zuckerberg wont create a social network. If you are copying these guys, you arent learning from them.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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The best entrepreneurs know this: every great business is built around a secret thats 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.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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What important truth do very few people agree with you on?
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Tolstoy opens Anna Karenina by observing: All happy families are alike; each unhappy family is unhappy in its own way. Business is the opposite. All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Elite students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them. Higher education is the place where people who had big plans in high school get stuck in fierce rivalries with equally smart peers over conventional careers like management consulting and investment banking. For the privilege of being turned into conformists, students (or their families) pay hundreds of thousands of dollars in skyrocketing tuition that continues to outpace inflation. Why are we doing this to ourselves?
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Monopoly is the condition of every successful business.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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All failed companies are the same: they failed to escape competition.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Madness is rare in individualsbut in groups, parties, nations, and ages it is the rule,
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In the most dysfunctional organizations, signaling that work is being done becomes a better strategy for career advancement than actually doing work (if this describes your company, you should quit now).
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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If your goal is to never make a mistake in your life, you shouldnt look for secrets. The prospect of being lonely but rightdedicating your life to something that no one else believes inis already hard. The prospect of being lonely and wrong can be unbearable.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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If your product requires advertising or salespeople to sell it, its not good enough: technology is primarily about product development, not distribution.
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By the time a student gets to college, he's spent a decade curating a bewilderingly diverse resume to prepare for a completely unknowable future. Come what may, he's ready--for nothing in particular.
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Ralph Waldo Emerson captured this ethos when he wrote: Shallow men believe in luck, believe in circumstances. Strong men believe in cause and effect.
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Customers wont care about any particular technology unless it solves a particular problem in a superior way. And if you cant monopolize a unique solution for a small market, youll be stuck with vicious competition.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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You should focus relentlessly on something youre good at doing, but before that you must think hard about whether it will be valuable in the future.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Every culture has a myth of decline from some golden age, and almost all peoples throughout history have been pessimists. Even today pessimism still dominates huge parts of the world. An indefinite pessimist looks out onto a bleak future, but he has no idea what to do about it. This describes Europe since the early 1970s, when the continent succumbed to undirected bureaucratic drift. Today the whole Eurozone is in slow-motion crisis, and nobody is in charge. The European Central Bank doesnt stand for anything but improvisation: the U.S. Treasury prints In God We Trust on the dollar; the ECB might as well print Kick the Can Down the Road on the euro. Europeans just react to events as they happen and hope things dont get worse.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.
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youve invented something new but you havent invented an effective way to sell it, you have a bad businessno matter how good the product.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Most of a tech companys value will come at least 10 to 15 years in the future.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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moving first is a tactic, not a goal.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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The best projects are likely to be overlooked, not trumpeted by a crowd; the best problems to work on are often the ones nobody else even tries to solve.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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CREATIVE MONOPOLY means new products that benefit everybody and sustainable profits for the creator. Competition means no profits for anybody, no meaningful differentiation, and a struggle for survival.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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All Rhodes Scholars had a great future in their past.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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In a world of scarce resources, globalization without new technology is unsustainable.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Even in engineering-driven Silicon Valley, the buzzwords of the moment call for building a lean startup that can adapt and evolve to an ever-changing environment. Would-be entrepreneurs are told that nothing can be known in advance: were supposed to listen to what customers say they want, make nothing more than a minimum viable product, and iterate our way to success. 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 wont 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 wont 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.
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When Yahoo! offered to buy Facebook for $1 billion in July 2006, I thought we should at least consider it. But Mark Zuckerberg walked into the board meeting and announced: Okay, guys, this is just a formality, it shouldnt take more than 10 minutes. Were obviously not going to sell here. Mark saw where he could take the company, and Yahoo! didnt.
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Instead of pursuing many-sided mediocrity and calling it well-roundedness, a definite person determines the one best thing to do and then does it.
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Indefinite attitudes to the future explain whats most dysfunctional in our world today. Process trumps substance: when people lack concrete plans to carry out, they use formal rules to assemble a portfolio of various options. This describes Americans today. In middle school, were encouraged to start hoarding extracurricular activities. In high school, ambitious students compete even harder to appear omnicompetent. By the time a student gets to college, hes spent a decade curating a bewilderingly diverse rsum to prepare for a completely unknowable future. Come what may, hes readyfor nothing in particular.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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The road doesnt have to be infinite after all. Take the hidden paths.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Unless you have perfectly conventional beliefs, its rarely a good idea to tell everybody everything that you know.
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Thats why hiring consultants doesnt work. Part-time employees dont work. Even working remotely should be avoided, because misalignment can creep in whenever colleagues arent together full-time, in the same place, every day. If youre deciding whether to bring someone on board, the decision is binary. Ken Kesey was right: youre either on the bus or off the bus.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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First, only invest in companies that have the potential to return the value of the entire fund.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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anyone would fight for things that matter; true heroes take their personal honor so seriously they will fight for things that dont matter.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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once youre 10x better, you escape competition.
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As a founder, your first job is to get the first things right, because you cannot build a great company on a flawed foundation.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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If youre less sensitive to social cues, youre less likely to do the same things as everyone else around you.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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A startup is the largest endeavor over which you can have definite mastery. You can have agency not just over your own life, but over a small and important part of the world. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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The most successful companies make the core progressionto first dominate a specific niche and then scale to adjacent marketsa part of their founding narrative.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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people then products then traffic then revenue.
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Why work with a group of people who dont even like each other?
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EVERY MOMENT IN BUSINESS happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin wont make a search engine. And the next Mark Zuckerberg wont create a social network. If you are copying these guys, you arent learning from them.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Erooms lawthats Moores law backwardobserves that the number of new drugs approved per billion dollars spent on R&D has halved every nine years since 1950.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Americans mythologize competition and credit it with saving us from socialist bread lines. Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Success is never accidental.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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if you want to create and capture lasting value, dont build an undifferentiated commodity business.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Watson, Deep Blue, and ever-better machine learning algorithms are cool. But the most valuable companies in the future wont ask what problems can be solved with computers alone. Instead, theyll ask: how can computers help humans solve hard problems?
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Simply stated, the value of a business today is the sum of all the money it will make in the future.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Elite students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them.
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Thiels law: a startup messed up at its foundation cannot be fixed.
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A board of three is ideal. Your board should never exceed five people, unless your company is publicly held. (Government regulations effectively mandate that public companies have larger boardsthe average is nine members.) By far the worst you can do is to make your board extra large. When unsavvy observers see a nonprofit organization with dozens of people on its board, they think: Look how many great people are committed to this organization! It must be extremely well run. Actually, a huge board will exercise no effective oversight at all; it merely provides cover for whatever microdictator actually runs the organization. If you want that kind of free rein from your board, blow it up to giant size. If you want an effective board, keep it small.
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Sometimes you do have to fight. Where thats true, you should fight and win.
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Finance epitomizes indefinite thinking because its the only way to make money when you have no idea how to create wealth.
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You probably cant be the Google of 2014 in terms of compensation or perks, but you can be like the Google of 1999 if you already have good answers about your mission and team.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Sometimes you do have to fight. Where thats true, you should fight and win. There is no middle ground: either dont throw any punches, or strike hard and end it quickly.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Competition can make people hallucinate opportunities where none exist.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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A product is viral if its core functionality encourages users to invite their friends to become users too.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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Paradoxically, then, network effects businesses must start with especially small markets. Facebook started with just Harvard studentsMark Zuckerbergs first product was designed to get all his classmates signed up, not to attract all people of Earth. This is why successful network businesses rarely get started by MBA types: the initial markets are so small that they often dont even appear to be business opportunities at
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Jobs planned the iPod to be the first of a new generation of portable post-PC devices, but that secret was invisible to most people.
Peter Thiel,
Zero to One: Notes on Startups, or How to Build the Future
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