Book Review - Zero to One (Peter Thiel)

Introduction

Zero to One describes the process of creating something radically new and taking a business from nothing to a seed (intensive growth) in contrast to the term “1 to n” meaning creating incremental improvements, scaling, and growing.

This book is very inspirational providing many insights, lessons, and concrete examples to help entrepreneurs and founders to adopt a different mindset when it comes to innovating in the early stage of a business.

Review and opinions

What important truth do very few people agree with you on?

The book starts with an interesting question to ask candidates during interviews. While this is an interesting question ask to a candidate, it’s also an interesting question to ask yourself. This question summarizes very well the concepts of thinking out of the box, envisioning original and innovative ideas, and standing on the point to debate.

Monopoly is the condition of every successful business.
The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine
Do not be good at many things, be very good at one thing.

The author explains that businesses succeed better when they differentiate rather than compete, competition creates rivalry, replication, obsession, and destroys profits.

Moreover, businesses should try to be unique, solve a single problem with a game-changer idea in a tiny niche, away from competition and trends. This way, you have a monopoly and can focus on the company’s mission.

More important than being the first mover is the last mover. You have to be durable
Don’t disrupt

It’s not important to be the first but what matters is to be the last. To become a dominant player depends on two things: the ability to monopolize the market and generate future cash flow. Learn from first movers and their mistakes then start small, dominate a niche et and move to the next segment of the market. Network effect will allow gaining traction at exponential growth.

The seven questions that every business must answer

  1. Engineering - IP or breakthrough technology to make it at least 10x times better than others.
  2. Timing - Is now the right time to start your business.
  3. Team - Do you have the right team.
  4. Distribution Channel - Can you not just create but deliver them.
  5. Secret - Do you see a unique opportunity that others don’t see.
  6. Monopoly- Are you becoming a major player in a small market first.
  7. Durability question - Will your market position be defensible 10 or 20 years into the future.

Thiel uses these 7 questions to explain why Greentech (or cleantech // renewal energy businesses) has failed during the past 10 years. Global warming is something real that needs to be addressed ASAP but to solve those issues, politicians, entrepreneurs, and investors followed the same trend and made common mistakes. The author took examples from the solar panel’s industry in particular:

  • Engineering: No significant breakthrough (cf. 10x improvements)
  • Timing: Solar tech doesn’t have exponential growth as semiconductors had
  • Monopoly: Solar industry is a drop in the energy industry and competing in a giant global market
  • People: No strong engineering team but mostly salesmen executive
  • Distribution: Installation is hard and costly: “Selling and delivering a product is as much important as the product”
  • Durability: Cost and Chinese competition
  • Secret: Goldrush

My final thought

I think this book shares some of the successful ingredients of famous companies like Paypal, Tesla, Airbnb, Spotify, and others. It’s a book that is easy to read and understand and sets some strong and easily memorable recommendations to lead a business from zero to one!

About the author

Peter Thiel is a technology entrepreneur and investor best known for co-founding PayPal. Since then he has co-founded the data analytics firm Palantir Technologies, made the first outside investment in Facebook, provided early funding for companies like SpaceX, LinkedIn, Yelp, and Spotify. He’s also quite controversial (racism, sexism, backing Trump in 2016, etc.)