Book Review: Zero to One

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zerotooneOne page two of Zero to One: Notes on Startups, or How to Build the Future, Peter Thiel says:

“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.”

This book is about the first principles of creating a successful startup. It is not a how-to manual. It is not a collection of success formulas. It is not a “this is how I did it” business book. It is a book about the first principles of creating a successful business startup.

If you’re looking for quick and easy answers, this is not the book for you. There are plenty of books out there that are filed with the “secrets” of startup success. But if you want some real insight into what makes a great startup success, this just could be the book that helps you.

The first thing you’ll learn is that copying what a Bill Gates or a Steve Jobs did will get you a copy of their startups. But it won’t get you a replica of their success.

Not only that, you can have a successful startup and even make a bunch of money, but what you do will only take the world from one to two. That’s not the kind of startup success that Thiel is talking about.

He’s talking about coming up with something truly new, a monopoly business, one that will take the world from zero to one and take you to riches “beyond the dreams of avarice.” Here are the characteristics of those “monopoly” businesses, according to Peter Thiel.

“What does a company with large cash flows far into the future look like? Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding.”

OK, that’s what a “zero to one monopoly business” looks like. What do those “first principles” look like? Most books about creating a successful startup have instructions for how to do it. Thiel’s book doesn’t have instructions, but it does have questions. Here are seven to evaluate your startup.

“1. The Engineering Question Can you create breakthrough technology instead of incremental improvements? 2. The Timing Question Is now the right time to start your particular business? 3. The Monopoly Question Are you starting with a big share of a small market? 4. The People Question Do you have the right team? 5. The Distribution Question Do you have a way to not just create but deliver your product? 6. The Durability Question Will your market position be defensible 10 and 20 years into the future? 7. The Secret Question Have you identified a unique opportunity that others don’t see?”

Bottom Line

This sure won’t be everyone’s cup of tea. But if you want a different and informed perspective on creating an astoundingly profitable startup, this book will do it for you.

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