The book draws on Thiel's experience as a co-founder of PayPal and Palantir, investor in hundreds of startups, including Facebook and SpaceX. Thiel cautions the book offers no formula for success. Such a formula cannot exist as every innovation is new and unique.
The most powerful pattern he has noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.
Progress can take one of two forms:
Example: If you take one typewriter and build 100, you have made horizontal progress. If you have a typewriter and build a word processor, you have made vertical progress..
Positively defined, a startup is the largest group of people you can convince of a plan to build a different future.
"The most contrarian thing of all is not to oppose the crowd but to think for yourself.". Is the advice given throughout the book.
Thiel encourages to think different, but most of all to think for yourself.
Thiel argues capitalism and competition are opposites.
Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away.
Because creating value is not enough, you also need to capture some of the value you create.
The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.
PayPal was in 2001 the only email-based payments company in the world. It employed fewer people than the restaurants on Castro Street (Mountain View, CA), where the Paypal team used to go for lunch. The business was much more valuable than all of those restaurants combined.
Starting a new restaurant is a really hard way to make money. If you lose sight of competitive reality and focus on trivial differentiating factors, maybe you think your naan is superior because of your great-grandmother’s recipe, your business is unlikely to survive.
The quote with which Tolstoy opens Anna Karenina might describe people, but for businesses it's 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.
The value of a business today is the sum of all the money it will make in the future.
Every monopoly is unique, but they usually share some combination of:
Every startup is small at the start. Every monopoly dominates a large share of its market. Therefore, every startup should start with a very small market.
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible.
A startup messed up at its foundation cannot be fixed.
Why would someone join your company as its 20th engineer when she could go work at Google for more money and more prestige?
You’ll 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.
Just cover the basics like health insurance and then promise what no others can: the opportunity to do irreplaceable work on a unique problem alongside great people.
The best startups might be considered slightly less extreme kinds of cults. The biggest difference is that cults tend to be fanatically wrong about something important.
People at a successful startup are fanatically right about something those outside it have missed.
The stark differences between man and machine mean that gains from working with computers are much higher than gains from trade with other people.
We don’t trade with computers any more than we trade with livestock or lamps.
The single greatest danger for a founder is to become so certain of his own myth that he loses his mind.
But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom.
Our task today is to find singular ways to create the new things that will make the future not just different, but better - to go from 0 to 1.
The essential first step is to think for yourself. Only by seeing our world anew, as fresh and strange as it was to the ancients who saw it first, can we both re-create it and preserve it for the future.
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