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Zero to One is about how to build companies that create new things.
In the most dysfunctional organizations, signaling that work is being done becomes a better strategy for career advancement than actually doing work (if this describes your company, you should quit now).
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.
Positively defined, a startup is the largest group of people you can convince of a plan to build a different future.
1. Make incremental advances
Anyone who claims to be able to do something great is suspect, and anyone who wants to change the world should be more humble. Small, incremental steps are the only safe path forward.
2. Stay lean and flexible All companies must be “lean,” which is code for “unplanned.” You should not know what your business will do; planning is arrogant and inflexible. Instead you should try things out, “iterate,” and treat entrepreneurship as agnostic experimentation.
3. Improve on the competition Don’t try to create a new market prematurely.
The only way to know you have a real business is to start with an already existing customer, so you should build your company by improving on recognizable produc...
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4. Focus on product, ...
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If your product requires advertising or salespeople to sell it, i...
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And yet the opposite principles are probably more correct: 1. It is better to risk boldness than triviality. 2. A bad plan is better than no plan. 3. Competitive markets destroy profits. 4. Sales matters just as much as product.
The most contrarian thing of all is not to oppose the crowd but to think for yourself.
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. Since it has no competition, it produces at the quantity and price combination that maximizes its profits.
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.
Monopolists can afford to think about things other than making money; non-monopolists can’t.
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.
the more we compete, the less we gain.
Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past.
Winning is better than losing, but everybody loses when the war isn’t one worth fighting.
But a great business is defined by its ability to generate cash flows in the future.
Simply stated, the value of a business today is the sum of all the money it will make in the future.
Service businesses especially are difficult to make monopolies. If you own a yoga studio, for example, you’ll only be able to serve a certain number of customers. You can hire more instructors and expand to more locations, but your margins will remain fairly low and you’ll never reach a point where a core group of talented people can provide something of value to millions of separate clients, as software engineers are able to do.
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
Amazon then had two options: expand the number of people who read books, or expand to adjacent markets.
As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible.
if someone else comes along and unseats you. 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.
Grandmaster José Raúl Capablanca put it well: to succeed, “you must study the endgame before everything else.”
“Shallow men believe in luck, believe in circumstances.… Strong men believe in cause and effect.”
Jobs saw that you can change the world through careful planning, not by listening to focus group feedback or copying others’ successes.
founders only sell when they have no more concrete visions for the company, in which case the acquirer probably overpaid; definite founders with robust plans don’t sell, which means the offer wasn’t high enough.
A business with a good definite plan will always be underrated in a world where people see the future as random.
Albert Einstein made the same observation when he stated that compound interest was “the eighth wonder of the world,”
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.
People are scared of secrets because they are scared of being wrong.
Now when I consider investing in a startup, I study the founding teams.
Ownership: who legally owns a company’s equity? • Possession: who actually runs the company on a day-to-day basis? • Control: who formally governs the company’s affairs?
As a general rule, everyone you involve with your company should be involved full-time.
For people to be fully committed, they should be properly compensated. Whenever an entrepreneur asks me to invest in his company, I ask him how much he intends to pay himself. A company does better the less it pays the CEO—that’s one of the single clearest patterns I’ve noticed from investing in hundreds of startups.
The graffiti artist who painted Facebook’s office walls in 2005 got stock that turned out to be worth $200 million, while a talented engineer who joined in 2010 might have made only $2 million.
Bob Dylan has said that he who is not busy being born is busy dying.
The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing. Every employee’s one thing was unique, and everyone knew I would evaluate him only on that one thing. I had started doing this just to simplify the task of managing people. But then I noticed a deeper result: defining roles reduced conflict. Most fights inside a company happen when colleagues compete for the same responsibilities.
a catchall term for everything it takes to sell a product—because
The Field of Dreams conceit is especially popular in Silicon Valley, where engineers are biased toward building cool stuff rather than selling it. But customers will not come just because you build it. You have to make that happen, and it’s harder than it looks.
But advertising doesn’t exist to make you buy a product right away; it exists to embed subtle impressions that will drive sales later.
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.
HOW TO SELL A PRODUCT
Two metrics set the limits for effective distribution. The total net profit that you earn on average over the course of your relationship with a customer (Customer Lifetime Value, or CLV) must exceed the amount you spend on average to acquire a new customer (Customer Acquisition Cost, or CAC).
Complex Sales
