Zero To One by Peter Thiel

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

Horizontal/Extensive progress ( 1 to n ) - copying things already done - globalization Vertical/Intensive progress ( 0 to 1 ) - doing new things - technology

A new company’s most important strength is new thinking : question received ideas and rethink business from scratch

If you can identify a delusional popular belief, you can find what lies behind it : the contrarian truth. - Nietzsche 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 these bubbles never disappear, instead they leave us with lessons about the same . How much of what you know is shaped by mistaken reaction to past mistakes? The most contrarian thing of all is not to oppose the crowd but to think for yourself !

What valuable company is nobody building? Non monopolists exaggerate tier distinction by defining tier market as intersection of various smaller markets, whereas monopolists disguise their monopoly by framing their market as a union of several large markets. If you lose sight of competitive reality and focus on trivial differentiating factors, your business is unlikely to survive. In business, money is either an important thing or it is everything. Monopolists can care about things other than money, non-monopolists cannot. Monopolies drive progress because the promise of years/decades of monopoly profits provides a powerful incentive to innovate. Monopolies can then keep on inventing from their profits as input to new researches In business equilibrium means stasis, stasis means death. If your industry is in competitive equilibrium there will always be someone to take your place at your death. Outside economic theory , businesses are only successful if they do somethings others cannot, monopoly hence is the condition of every successful business All failed companies are similar in that way, they failed to escape competition.

Really it’s competition and not business that is like war, allegedly necessary, supposedly valiant, but ultimately destructive. If you’re less sensitive to social cues, you’re less likely to do the same things as everyone else around you Winning is better than losing, but everyone loses when the ear isn’t worth fighting.

The value of a business today is the sum of all the money it will make in future. If you focus on near term growth above all else, you miss the most important question you should be asking : will this business still be around a decade from now? You will need numbers + qualitative characteristics of your business for this Every monopoly has a combo of : proprietary tech, network effects, economies of scale and branding Proprietary tech must be 10x better than its closest substitute in some important dimension to lead to a monopolistic advantage, else it is just a marginal improvement and will be hard to sell Network effects will produce great results only if your product is valuable to its first few customers Start small and monopolize. It’s easier to dominate a small market than a large one. Small doesn’t mean non existent Dominate a niche then scale to adjacent markets, as you craft the plan to expand to adjacent markets, don’t disrupt and avoid competition. You must study the endgame before anything else

Shallow people believe in luck/circumstances, strong ones believe in cause and effect In an indefinite world, money is more valuable than what can be done with it, only in a definite future is money a means to an end, not the end itself Leanness is a methodology not a goal, making small changes to things that already exist might lead you to a local maximum, but it won’t help you find the global max. Founders only sell when they have no concrete visions for the company, a business with a good definite plan will always be underrated in a world where people see the future as random. It begins by rejecting the unjust tyranny of chance. You are not a lottery ticket

Power law : 80/20 ( best investment in a successful VC fund equals or outperforms the entire rest of the fund combined ) Applies to your career as well, an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve You should focus relentlessly on something you’re good at doing, but before that you must think hard about whether it will be valuable in the future

SOCIAL TRENDS conspiring to root out belief in secrets Incrementalism - one by one, day by day, grade by grade. If you overachieve you won't be rewarded Risk Aversion - fear of being wrong, dedicating your life to something no one believes in and then the prospect of being lonely and wrong can be unbearable Complacency - why search for new secrets when you can comfortably collect rents on everything that has already been done Flatness - people imagine if it were possible to find something new won’t someone smarter / more creative have found it already?

If you think something hard is impossible, you will never even start trying to achieve it. Belief in secrets is an effective truth

What secrets is nature not telling you? What secrets are people not telling you?

As a founder your first job is to the the first things right, you cannot build a company on a flawed foundation Every single member of your board matters, even one problem director will cause you pain and may jeopardize your company’s future. A board of 3 is ideal, it should never exceed 5 unless the company is publicly held. Any kind of cash is more about the present that future, CEo should be aligned to making more value in the future Equity hence being the form of compensation that can effectively orient people toward creating value in the future

Since time is your most valuable asset, it's odd to spend it working with people who don't envision any long term future together. People have to be talented but more than that they have to be excited to work specifically with us You will attract the employees you need if you can explain why your mission is compelling: not why it’s important in general, but why you’re doing something important that no one else is going to get done. The second thing is how the person if perfect fit with your team, else there is no point.

Advertising doesn’t exist to make you buy a product right away, it exists to embed subtle impressions that will drive sales later Think of distribution as something essential to the design of your product. If you’ve invented something new but no way to sell it, you have a bad business no matter how good the product Total net profit on average over the course of relationship with a customer (CLV/Customer Lifetime Value), must exceed the amount you spend on average to acquire a new customer (CAC/Customer Acquisition Cost) Types Complex Sales : CAC > $10million ( CEO mostly handles all deals ) Personal Sales: CAC $10k - $100k ( Sales dedicated team ) Marketing : CAC $100 Viral Marketing : CAC $1 ( A product is viral if its core functionality encourages users to invite their friends to become users too )

7 Question that every business must answer

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