Zero to One: Notes on Start Ups, or How to Build the Future

by Blake Masters

Like acting, sales works best when hidden. This explains why almost everyone whose job involves distribution—whether they’re in sales, marketing, or advertising—has a job title that has nothing to do with those things. People who sell advertising are called “account executives.” People who sell customers work in “business development.” People who sell companies are “investment bankers.” And people who sell themselves are called “politicians.” There’s a reason for these redescriptions: none of us wants to be reminded when we’re being sold.

If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business—no matter how good the product.

Viral Marketing

EVERYBODY SELLS

Globalization Means Substitution

Technology Means Complementarity

America’s two biggest spy agencies take opposite approaches: The Central Intelligence Agency is run by spies who privilege humans. The National Security Agency is run by generals who prioritize computers.

Today, more than 97% of recruiters use LinkedIn and its powerful search and filtering functionality to source job candidates, and the network also creates value for the hundreds of millions of professionals who use it to manage their personal brands.

The very term “machine learning” evokes imagery of replacement, and its boosters seem to believe that computers can be taught to perform almost any task, so long as we feed them enough training data. Any user of Netflix or Amazon has experienced the results of machine learning firsthand: both companies use algorithms to recommend products based on your viewing and purchase history. Feed them more data and the recommendations get ever better. Google Translate works the same way, providing rough but serviceable translations into any of the 80 languages it supports—not because the software understands human language, but because it has extracted patterns through statistical analysis of a huge corpus of text.

As we find new ways to use computers, they won’t just get better at the kinds of things people already do; they’ll help us to do what was previously unimaginable.

AT THE START of the 21st century, everyone agreed that the next big thing was clean technology.

Most cleantech companies crashed because they neglected one or more of the seven questions that every business must answer: 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?

Exaggerating your own uniqueness is an easy way to botch the monopoly question. Suppose you’re running a solar company that’s successfully installed hundreds of solar panel systems with a combined power generation capacity of 100 megawatts. Since total U.S. solar energy production capacity is 950 megawatts, you own 10.53% of the market. Congratulations, you tell yourself: you’re a player. But what if the U.S. solar energy market isn’t the relevant market? What if the relevant market is the global solar market, with a production capacity of 18 gigawatts? Your 100 megawatts now makes you a very small fish indeed: suddenly you own less than 1% of the market.

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And what if the appropriate measure isn’t global solar, but rather renewable energy in general? Annual production capacity from renewables is 420 gigawatts globally; you just shrank to 0.02% of the market. And compared to the total global power generation capacity of 15,000 gigawatts, your 100 megawatts is just a drop in the ocean.

Cleantech companies effectively courted government and investors, but they often forgot about customers. They learned the hard way that the world is not a laboratory: selling and delivering a product is at least as important as the product itself.

Some people are strong, some are weak, some are geniuses, some are dullards—but most people are in the middle.

THE RETURN OF THE KING

The ancients saw all of history as a neverending alternation between prosperity and ruin. Only recently have people dared to hope that we might permanently escape misfortune, and it’s still possible to wonder whether the stability we take for granted will last.

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.