About the Book
Zero to One: Notes on Startups, or How to Build the Future was written by Paypal founder Peter Thiel and published on September 16. 2014 by Currency. The book sports 224 pages.
Peter Thiel starts off this book by discussing how there can only be one Bill Gates, Mark Zuckerberg, and Larry Paige and Sergey Brin. This is because their ideas started the fields that they are in hence there can never be another Microsoft, Facebook, or Google because they created a technology that didn’t exist before. Companies that now go into operating systems, social media or search engine, are not innovators but copiers.
Thiel then discusses characteristics of good companies and startups. One characteristic is that companies and startups are in fact monopolies in disguised – this is because monopolies provide the maximum profit for the company and according to Thiel good for society. On the converse companies that are not monopolies try to disguise themselves as ones. Another characteristic he describes was finding a strong niche market and then expanding into a larger marker. He also goes over concepts such as what makes a good CEO, managing uncertainty, network effect (companies like Paypal become more valuable, marketable and monopolist as it’s user base increases in size) and economies of scale.
He also applies these concepts to his startup Paypal all the while painting the chaotic landscape of the dotcom era which was when his company started. He also applies these concepts to companies such as Ebay, Amazon and Tesla Motor which is founded by one of Thiels partners at Paypal, Elon Musk.
Key Takeaways and commentary
I originally sought out this book since there were days where I dreamed of starting a company. I found these takeaways very helpful and useful and I’ll actually elaborate on them in later posts using analytical frameworks such as Porter’s Five forces. The takeaways are:
- Pick a sizable market and focus on a niche within that market
- Use the network effect and economy of scale
- Make sure your business is actually sound and viable
- Find good partners – someone you know you can work with and have a history of work with one another
- The first movers advantage isn’t always an advantage
- Are good businesses are actually monopolies in disguised
- Monopolies will naturally die off
This is actually a pretty insightful read as it lets you see into what it took for Peter Thiel to create Paypal and insights on how large leading firms in tech operate. These key points that he brings up are very interesting to me as they have also been elaborated on by academics and consultants in business strategy – basically showing that these ideas aren’t just theory.
In all I believe that this book is a good read, especially if you’re looking to start a company.
Again if you found this post useful or enjoyable, please share and leave a like. Thank you! Also feel free to leave a comment. Stay tuned for tomorrows book Influence: The Psychology of Persuasion, Revised Edition by Robert Cialdini.
For more information on the 2018 challenge, visit the following link: Business Trek 2018 reading challenge.
You can also get the book via the following link: Zero to One: Notes on Startups, or How to Build the Future
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