Zero to One – Blake Masters, Peter Thiel | Free Book Summary

Zero to One – Blake Masters, Peter Thiel

This book is a must read in Silicon Valley.

Myths are important and dangerous

The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. 

But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom.

Our task: go from 0 to 1

 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.

Create the future

The future is a time when the world looks fundamentally different from today.

We need two types of progress to create the future:

Horizontal progress/Globalization (from 1 to n) – Copying things that work somewhere and making them available everywhere.

Vertical progress/Technology (from 0 to 1) – Doing new things that nobody else has ever done.

Aim to build a monopoly

Aim to build a company that is so different and ahead of the others that it’s not even competing.

A monopoly enables you to:

Allocate more resources towards innovation and long-term plans.

Stop focusing on generating revenue to survive.

Competition narrows your focus on beating the other companies. While this makes you good at that which you are competing on, it doesn’t guarantee success.

You risk losing sight of the big picture and of what is important for future growth, if you keep relating to what your competitors are doing.

Proprietary technology

Proprietary technology is a great advantage on which you can build a monopoly business because it makes it difficult for other companies to replicate your product.

However, for proprietary technology to offer an advantage, it needs to be 10x better than existing solutions. You can achieve this by inventing something new or radically improving an existing solution.

Start with a niche market

Startups should start with a very small market because it’s easier to dominate than a large one. Once you dominate it, scale up and move into adjacent broader markets.

The perfect target market for a startup is a small group of particular people that are served by few or no competitors.

Get the right co-founder

Choosing a co-founder is a crucial decision at the start of every company – one that’s very hard to correct. You should team up with someone that has complementary skills and with whom you share a prehistory.

A great founding team is critical for the success of the startup. They draw people in with their vision, get alignment across teams, inspire loyalty, and bring out the best work from everybody.

Cash vs. Equity

You need to get the right balance between cash and equity when rewarding employees:

Cash is about compensating people for the job they are doing today.

Equity orients people toward increasing the company’s value in the future.

High cash compensation teaches employees to claim value from the company as it is today, instead of investing their time to create new value in the future.

Do your own recruiting

Attract people by explaining why your mission is compelling and why your company is a unique match for them.

Select only people that match your criteria and can be involved full-time.

Build a team of skilled people that can work together cohesively.

Seven questions every business must answer

Technology – Can you create a breakthrough technology instead of incremental improvements?

Timing – Is now the right time to start your particular business?

Monopoly – Are you starting with a big share of a small market?

People – Do you have the right team?

Distribution – Do you have a way to deliver your product?

Durability – Will your market position be defensible 10 and 20 years into the future?

Secrets – Have you identified a unique opportunity that others don’t see?