Zero To One
Today I finished the book Zero to One and I wanted to go over exactly what parts I highlighted and took note of, and what passages I wrote “THIS.” in the margin of. Overall I think the book is following the theme of the importance of asking the right questions. The author, Peter Thiel of the Paypal mafia, explains what questions and answers are necessary to successfully re-create the world we live in in order to preserve it for the future.
1 to n vs. 0 to 1
1 to n is not a singular moment. It is taking something we already know and spreading it else where. It is globalization. It is nothing new, it is just more of something familiar. Horizontal. Synthetic imagination.
0 to 1 is technology. The singular act of some new thing. It is found in by founders in unexpected places. Vertical. Creative imagination. Any new and better way of doing things.
“No one can predict the future exactly, but we know two things: “it’s going to be different, and it must be rooted in today’s world.”
“Spreading old ways to create wealth around the world will result in devastation, not riches. In a world of scarce resource, globalization without new technology is unsustainable.”
THIS
“The Old Economy couldn’t handle the challenges of globalization. Something needed to work- and work in a big way- if the future was going to be better at all. By indirect proof, the New Economy of the internet was the only way forward.”
“when you pay people to be your customers, exponential growth means an exponentially growing cost structure”
“The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.”
“Victory awaits him who has everything in order- luck, people call it”.
“Long-term planning is often undervalued by out indefinite short-term world”
“A business with a good definite plan will always be underrated in a world where people see the future as random.”
“The best investment in a successful fund equals or outperforms the entire rest of the fund combined.”
“If insights that look so elementary in retrospect can support important and valuable businesses, there must remain many great companies still to start.”
“Sales- an orchestrated campaign to change surface appearances without changing the underlying reality.”
“Effective distribution = CLV (Customer Liftetime Value) > CAC (Customer Acquistion Cost). It is the hidden bottleneck if you have something new but you havent invented an effective way to sell it.”
“If every new user leads to more than one additional user, you can achieve a chain reaction of exponential growth.”
“If you can get just one distribution channel to work, you have a great business.”
“An entrepreneur can’t benefit from macro-scale insight unless his own plans begin at the micro-scale. No sector will ever be so important that merely participating in it will be enough to build a great company”
The Power Law
This is hiding in plain sight. It’s understanding makes all the difference in business and life. The last two books I have read have talked about this. Both say that it is actually the world we live in verus the bell curve which is the perception.
imagThe degree of difference are profound.
“Venture-backed companies create 11% of all private sector jobs. They generate annual revenues equivalent to an astounding 21% of GDP. The dozen largest tech companies were all venture-backed. Together those 12 companies are worth more than $2 trillion, more than all other tech companies combined”.
“People who understand the power law will hesitate more than others when it comes to founding a new venture: they know how tremendously successful they could become by joining the very best company while it’s growing fast. The power law means that differences between companies will dwarf the differences in roles inside companies.”
Monopoly is the condition of every successful business. Competition is an ideology and leanness is a methodology. Iteration without a bold plan won’t take you from 0 to 1. Make a 10x improvement to an existing small market and dominate it. Expand into adjacent markets and make it part of the founding narrative. Be the last mover. The last great development and scale up from there. Whoever is the first to dominate the most important segment of a market with viral potential, will be the last mover in the whole market.
The Questions
What important truth do very few people agree with you on?
What valuable company is nobody building?
How can computers help humans solve hard problems?
Can you create breakthrough technology instead of incremental improvements? Is now the right time to start your particular business?
Are you starting with a big share of a small market?
Do you have the right team?
Do you have a way to not just create but deliver your product?
Will your market position be defensible 10 and 20 years into the future?
Have you identified a unique opportunity that others don’t see?
Recurring Themes
The Power Laws
IBM WATSON
AI(computers) Substitution vs. Complementary for humans
The right questions