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Preview — Zero to One by Peter Thiel
by Peter Thiel
Read between April 25 - May 11, 2018
WHENEVER I INTERVIEW someone for a job, I like to ask this question: “What important truth do very few people agree with you on?”
Brilliant thinking is rare, but courage is in even shorter supply than genius.
Properly understood, any new and better way of doing things is technology.
In a world of scarce resources, globalization without new technology is unsustainable.
how much of what you know about business is shaped by mistaken reactions to past mistakes?
(French chef and winner of three Michelin stars Bernard Loiseau was quoted as saying, “If I lose a star, I will commit suicide.” Michelin maintained his rating, but Loiseau killed himself anyway in 2003 when a competing French dining guide downgraded his restaurant.)
Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits.
Sometimes you do have to fight. Where that’s true, you should fight and win. There is no middle ground: either don’t throw any punches, or strike hard and end it quickly.
If you can recognize competition as a destructive force instead of a sign of value, you’re already more sane than most.
Simply stated, the value of a business today is the sum of all the money it will make in the future. (To properly value a business, you also have to discount those future cash flows to their present worth, since a given amount of money today is worth more than the same amount in the future.)
Most of a tech company’s value will come at least 10 to 15 years in the future.
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.
You can also make a 10x improvement through superior integrated design.
every startup should start with a very small market.
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
to succeed, “you must study the endgame before everything else.”
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.
When a big company makes an offer to acquire a successful startup, it almost always offers too much or too little: 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.
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.
Contrarian thinking doesn’t make any sense unless the world still has secrets left to give up.
A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator.
It’s very hard to go from 0 to 1 without a team.
A board of three is ideal. Your board should never exceed five people, unless your company is publicly held.
Max Levchin, my co-founder at PayPal, says that startups should make their early staff as personally similar as possible.
Most fights inside a company happen when colleagues compete for the same responsibilities. Startups face an especially high risk of this since job roles are fluid at the early stages. Eliminating competition makes it easier for everyone to build the kinds of long-term relationships that transcend mere professionalism.
Internal conflict is like an autoimmune disease: the technical cause of death may be pneumonia, but the real cause remains hidden from plain view.
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.”
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.
poor sales rather than bad product is the most common cause of failure.
computers are complements for humans, not substitutes.
No sector will ever be so important that merely participating in it will be enough to build a great company.
The lesson for founders is that individual prominence and adulation can never be enjoyed except on the condition that it may be exchanged for individual notoriety and demonization at any moment