Zero To One by Peter Thiel

Rating: 8/10
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Notes

“The most contrarian thing of all is not to oppose the crowd but to think for yourself.”

“Brilliant thinking is rare, but courage is in even shorter supply than genius.”

“The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers.”

“What are people not allowed to talk about? What is forbidden or taboo?”

“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.”

Technology and globalization

“That progress can take one of two forms. Horizontal or extensive progress means copying things that work—going from 1 to n. Horizontal progress is easy to imagine because we already know what it looks like. Vertical or intensive progress means doing new things–going from 0 to 1.”

“At the macro level, the single word for horizontal progress is globalization–taking things that work somewhere and making them work everywhere.”

“The single word for vertical, 0 to 1 progress is technology.”

“Properly understood, any new and better way of doing things is technology.”

“Even our everyday language suggests we believe in a kind of technological end of history: the division of the world into the so-called developed and developing nations implies that the “developed” world has already achieved the achievable, and that poorer nations just need to catch up.”

“Positively defined, a startup is the largest group of people you can convince of a plan to build a different future.”

On monopoly and competition

“The opposite of perfect competition is monopoly. Whereas a competitive firm must sell at the market price, a monopoly owns its market, so it can set its own prices.”

“…by “monopoly”, we mean the kind of company that’s so good at what it does that no other firm can offer a close substitute.”

“…the history of progress is a history of better monopoly businesses replacing incumbents.”

“Monopolies drives progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans to finance the ambitious research projects that firms locked in competition can’t dream of.”

“Creative monopoly means new products that benefit everybody and sustainable profits for the creator. Competition means no profits for anybody, no meaningful differentiation, and a struggle for survival.”

“Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past.”

Monopoly companies

“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.”

“The clearest way to make a 10x improvement is to invent something completely new. If you build something valuable there was nothing before, the increase in value is theoretically infinite.”

“Or you can radically improve an existing solution: once you’re 10x better, you escape competition.”

“Paradoxically, then, network effects businesses must start with especially small markets.”

“As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible.”

“The strange history of the Baby Boom produced a generation of indefinite optimists so used to effortless progress that they feel entitled to it”

“Making small changes to things that already exist might lead you to a local maximum, but it won’t help you find the global maximum.”

“But iteration without a bold plan won’t take you from 0 to 1. A company is the strangest place of all for an indefinite optimist: why should you expect your own business to succeed without a plan to make it happen? Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best.”

“A startup is the largest endeavor over which you can have definite mastery. You can have agency not just over your own life, but over a small and important part of the world. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.”

“A great company is a conspiracy to change the world;”

“But advertising doesn’t exist to make you buy a product right away; it exists to embed subtle impressions that will drive sales later. Anyone who can’t acknowledge its likely effect on himself is doubly deceived.”

“The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.”

“No sector will ever be so important that merely participating in it will be enough to build a great company.”