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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.
Startups operate on the principle that you need to work with other people to get stuff done, but you also need to stay small enough so that you actually can.
a startup is the largest group of people you can convince of a plan to build a different future.
“Madness is rare in individuals—but in groups, parties, nations, and ages it is the rule,”
If you can identify a delusional popular belief, you can find what lies hidden behind it: the contrarian truth.
Creating value is not enough—you also need to capture some of the value you create.
if you want to create and capture lasting value, don’t build an undifferentiated commodity business.
In business, money is either an important thing or it is everything.
If your industry is in a competitive equilibrium, the death of your business won’t matter to the world; some other undifferentiated competitor will always be ready to take your place.
Monopoly is the condition of every successful business.
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.
Simply stated, 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 the following characteristics: proprietary technology, network effects, economies of scale, and branding.
As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage.
This is why successful network businesses rarely get started by MBA types: the initial markets are so small that they often don’t even appear to be business opportunities at all.
A good startup should have the potential for great scale built into its first design.
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
It’s much better to be the last mover—that is, to make the last great development in a specific market and enjoy years or even decades of monopoly profits.
The indefinite pessimist can’t know whether the inevitable decline will be fast or slow, catastrophic or gradual. All he can do is wait for it to happen, so he might as well eat, drink, and be merry in the meantime: hence Europe’s famous vacation mania.
Definite optimism works when you build the future you envision.
Indefinite pessimism works because it’s self-fulfilling: if you’re a slacker with low expectations, they’ll probably be met.
A business with a good definite plan will always be underrated in a world where people see the future as random.
“For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them”
venture returns don’t follow a normal distribution overall. Rather, they follow a power law: a small handful of companies radically outperform all others.
The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined.
only invest in companies that have the potential to return the value of the entire fund.
If everything worth doing has already been done, you may as well feign an allergy to achievement and become a barista.
incrementalism.
risk aversion.
complacency.
“flatness.”
every great business is built around a secret that’s hidden from the outside. A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator.
“Thiel’s law”: a startup messed up at its foundation cannot be fixed.
In the boardroom, less is more. The smaller the board, the easier it is for the directors to communicate, to reach consensus, and to exercise effective oversight.
A board of three is ideal. Your board should never exceed five people, unless your company is publicly held.
If you want that kind of free rein from your board, blow it up to giant size. If you want an effective board, keep it small.
anyone who doesn’t own stock options or draw a regular salary from your company is fundamentally misaligned.
At the margin, they’ll be biased to claim value in the near term, not help you create more in the future.
If you’re deciding whether to bring someone on board, the decision is binary. Ken Kesey was right: you’re either on the bus or off the bus.
High pay incentivizes him to defend the status quo along with his salary, not to work with everyone else to surface problems and fix them aggressively. A cash-poor executive, by contrast, will focus on increasing the value of the company as a whole.
Anyone who prefers owning a part of your company to being paid in cash reveals a preference for the long term and a commitment to increasing your company’s value in the future.
Since time is your most valuable asset, it’s odd to spend it working with people who don’t envision any long-term future together. If you can’t count durable relationships among the fruits of your time at work, you haven’t invested your time well—even in purely financial terms.
Recruiting is a core competency for any company. It should never be outsourced. You need people who are not just skilled on paper but who will work together cohesively after they’re hired.
General and undifferentiated pitches don’t say anything about why a recruit should join your company instead of many others.
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.
What makes a startup employee instantly distinguishable to outsiders is the branded T-shirt or hoodie that makes him look the same as his co-workers.
The startup uniform encapsulates a simple but essential principle: everyone at your company should be different in the same way—a tribe of like-minded people fiercely devoted to the company’s mission.
For the company to work, it didn’t matter what people looked like or which country they came from, but we needed every new hire to be equally obsessed.
