Startups should start with a very small market because it's easier to dominate than a large one. Once you dominate it, scale up and move into adjacent broader markets.The perfect target market for a startup is a small group of particular people that are served by few or no competitors.

Start with a niche market

The value of a business today is the sum of all the money it will make in the future. Great businesses have the ability to generate significant cash flows in the future.This explains why promising tech companies have such high valuations. Most of that value will come 10 to 15 years into the future.

Future value

﻿A startup is the largest group of people you can convince of a plan to build a different future.

Aim to build a company that is so different and ahead of the others that it's not even competing.A monopoly enables you to:<ul><li>Allocate more resources towards innovation and long-term plans.</li><li>Stop focusing on generating revenue to survive.</li></ul>

Aim to build a monopoly

<ol><li>Technology - Can you create a breakthrough technology instead of incremental improvements?</li><li>Timing - Is now the right time to start your particular business?</li><li>Monopoly - Are you starting with a big share of a small market?</li><li>People - Do you have the right team?</li><li>Distribution - Do you have a way to deliver your product?</li><li>Durability - Will your market position be defensible 10 and 20 years into the future?</li><li>Secrets - Have you identified a unique opportunity that others don't see?</li></ol>

Seven questions every business must answer

Competition narrows your focus on beating the other companies. While this makes you good at that which you are competing on, it doesn't guarantee success.You risk losing sight of the big picture and of what is important for future growth, if you keep relating to what your competitors are doing.

Competition is for losers

<ul><li>Attract people by explaining why your mission is compelling and why your company is a unique match for them.</li><li>Select only people that match your criteria and can be involved full-time.</li><li>Build a team of skilled people that can work together cohesively.</li></ul>

Do your own recruiting

You need to get the right balance between cash and equity when rewarding employees:<ul><li>Cash is about compensating people for the job they are doing today.</li><li>Equity orients people toward increasing the company's value in the future.</li></ul>High cash compensation teaches employees to claim value from the company as it is today, instead of investing their time to create new value in the future.

Cash vs. Equity

﻿No company has a culture; every company is a culture. A startup is a team of people on a mission, and a good culture is just what that looks like on the inside.

Proprietary technology is a great advantage on which you can build a monopoly business because it makes it difficult for other companies to replicate your product.However, for proprietary technology to offer an advantage, it needs to be 10x better than existing solutions. You can achieve this by inventing something new or radically improving an existing solution.

Proprietary technology

Choosing a co-founder is a crucial decision at the start of every company - one that's very hard to correct. You should team up with someone that has complementary skills and with whom you share a prehistory.A great founding team is critical for the success of the startup. They draw people in with their vision, get alignment across teams, inspire loyalty, and bring out the best work from everybody.

Get the right co-founder

The future is a time when the world looks fundamentally different from today.We need two types of progress to create the future:<ol><li>Horizontal progress/Globalization (from 1 to n) - Copying things that work somewhere and making them available everywhere.</li><li>Vertical progress/Technology (from 0 to 1) - Doing new things that nobody else has ever done.</li></ol>

Create the future

#1 NEW YORK TIMES BESTSELLER If you want to build a better future, you must believe in secrets. The great secret of our time is that there are still uncharted frontiers to explore and new inventions to create. In Zero to One, legendary entrepreneur and investor Peter Thiel shows how we can find singular ways to create those new things. Thiel begins with the contrarian premise that we live in an age of technological stagnation, even if we’re too distracted by shiny mobile devices to notice. Information technology has improved rapidly, but there is no reason why progress should be limited to computers or Silicon Valley. Progress can be achieved in any industry or area of business. It comes from the most important skill that every leader must master: learning to think for yourself. Doing what someone else already knows how to do takes the world from 1 to n, adding more of something familiar. But when you do something new, you go from 0 to 1. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. Tomorrow’s champions will not win by competing ruthlessly in today’s marketplace. They will escape competition altogether, because their businesses will be unique. Zero to One presents at once an optimistic view of the future of progress in America and a new way of thinking about innovation: it starts by learning to ask the questions that lead you to find value in unexpected places.

productivity

Productivity

problemsolving

Problem Solving

business

Business

startup

Startups

books

Books

WHAT VALUABLE COMPANY IS NOBODY BUILDING? The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. If you are copying these guys, you aren’t learning from them. It’s easier to copy a model than to make something new: doing what we already know how to do takes the world from 1 to n, adding more of something familiar. Every new creation goes from 0 to 1. This book is about how to get there. ‘Peter Thiel has built multiple breakthrough companies, and Zero to One shows how.’ ELON MUSK, CEO of SpaceX and Tesla ‘This book delivers completely new and refreshing ideas on how to create value in the world.’ MARK ZUCKERBERG, CEO of Facebook ‘When a risk taker writes a book, read it. In the case of Peter Thiel, read it twice. Or, to be safe, three times. This is a classic.’ NASSIM NICHOLAS TALEB, author of The Black Swan

Peter Thiel is an accomplished writer whose work has resonated with readers around the world. Peter Thiel has published several books that explore a range of topics, from fiction to nonfiction, and has received critical acclaim for the ability to weave compelling narratives. Peter Thiel's writing style is known for its depth and authenticity, and has earned quite a loyal following of readers.

Peter Thiel

Blake Masters is an accomplished writer whose work has resonated with readers around the world. Blake Masters has published several books that explore a range of topics, from fiction to nonfiction, and has received critical acclaim for the ability to weave compelling narratives. Blake Masters's writing style is known for its depth and authenticity, and has earned quite a loyal following of readers.

PETER THIEL

Similar ideas

PETER THIEL

Start with a small market and dominate

People prefer leaders with charisma