Zero to One

The dot-com bubble taught people 4 lessons:

1. Make incremental advances
2. Stay lean and flexible
3. Improve on the competition
4. Focus on product, not sales

And yet, Thiel argues exactly the contrary, providing the opposite principles which he believes to probably be more correct:

1. It is better to risk boldness than triviality
2. A bad plan is better than no plan
3. Competitive markets destroy profits
4. Sales matter just as much as product

Why is Google worth more than every U.S. airline combined? Economists like to put the "blame" on two things:

• Perfect competition
• Monopoly

The first manifests itself when producer supply meets consumer demand. In this scenario, no company makes an economic profit in the long run.

The second, however, stands opposite to the first, with the winner being so good compared to the rest that it distances itself and manages to control quantity and prices.

So, if you want to thrive, don't build an undifferentiated commodity business. Don't fail to escape competition.

Non-monopolists define their market as the intersection of smaller markets.

Monopolists disguise their monopoly by defining it as the union of larger markets.

You can only reap network effects if the very first users of your product find it valuable, when the network can only be small.

To put it differently, it's hard to build a product whose main selling point revolves around having a huge network when in the beginning you don't have a huge network. Initially, it must provide value not through the size of its network.

Every startup starts small

+ Every monopoly dominates it market

= Start with a small market and own it

It's better to own 90% of a small market than 10% of a large market. Dominate a niche and then scale to adjacent markets.

Kaczynski claimed that an individual "needs to have goals whose attainment requires effort, and needs to succeed in at least attaining some of his goals".

Goals can be grouped into three:

1. Those satisfiable with minimal effort
2. Those satisfiable with considerable effort
3. Those that cannot be satisfied, no matter the effort

"To say that there are no secrets left today would mean that we live in a society with no hidden injustices."

If we know everything, then the majority of a democratic society practices only what is deemed to be just. If we admit we don't, we can explore, we can come up with change and admit that we are not doing things in the perfect way.

• Ownership: who legally owns the equity
• Possession: who runs it daily
• Control: who govers its affairs

This trio can lead to misalignment and big companies are prone to misalignment.

Cash is more about the present. Equity is more about the future. Whereas big companies can compensate with fat checks, statups can pay in equity, promising a higher returned value later rather than now.

Wanting equity means believing in the company.

The best company keeps an open mind towards invention. The founding a company stops when creation stops. Doing the founding right means setting the company on the path of creation and experimenting rather than that of stewardship of success.

When hiring, you need to sell your mission. Not only that, but you need to convince others that your company is the only one who can get it done.

As for getting new additions to the team, if you can't explain to them why your company is the best match, they probably aren't the best match for you either.

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?

You should strive to be the last mover in a particular market, being not necessarily the innovator, but the one who does it best.

Thinking long-term is key here: what would the world look like in 10, 20 years from now and how would your business fit in?

“The lesson for founders is that individual prominence and adulation can never be enjoyed except on the condition that it may be exchanged for individual notoriety and demonization at any moment—so be careful."

A founder's importance lies not in the value of his or her work, but in the ability to bring out the best work from everyone in the company.