Book Review: Zero To One – Notes on Startups or How to Build the Future by Peter Thiel

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My approach and philosophy about books and read are the following:

– Read as much as you can;
– Read broadly, read what a lot of people don’t usually read. If you read what everybody else is reading, you don’t have a competitive advantage; and
– Read books that challenge you. The tendency is to read authors who say things that we tend to agree with. Growth comes from reading books that you don’t agree with but you learn from.

My management accountant lecture once said that accountants should have a view, we should not sit on the fence, whether we are right or wrong doesn’t matter, what matters is that we take a view. One thing is certain Peter Thiel took a view with this book, whether he is right or not is not the issue, he took a view, actually a lot of views expressed in this book.

I reading and reviewing this book, I had to write down some of my contrarian views to that of Peter Thiel’s views.

Zero to One really challenged me. I thoroughly enjoyed the book even if I have found myself in violent disagreement with many of its thoughts. The book opens up with these words.

  • “Every moment in business happens only once.
  • The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.
  • It’s easier to copy a model than to make something new: doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1. The act of creation is singular, as is the moment of creation, and the result is something fresh and strange.”
  • “Doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1. The act of creation is singular, as is the moment of creation, and the result is something fresh and strange.”

Thiel spends a great deal of the preface and first chapter putting into perspective the difference between going from “1 to n” (doing more of what’s already been done) vs. going from “0 to 1” (doing something that’s never been done before).

Bottom line? Challenge the status quo. Really and truly do your best to “think differently” and go from “0 to 1” rather than “1 to n”.

Initially, I kind of liked these above quotes. It is indeed hard to imagine a new business to threaten the dominance of Google Search or Facebook’s social network. But the fact that Google search dominates is not really a Zero to One effect, but a decisive improvement over previously existing internet search engines.

Facebook was not originally conceived of as a dominant social platform; it so happened that it turned out to be well liked by millions of people beyond the original community of Harvard students. In operating systems we already have Linux and Android (using Linux) which have way more deployments than Windows. So it is not the case that “every moment in business” happens only once, unless in a very literal sense.

According to Thiel the great secret of our time is that there are still uncharted frontiers to explore and new inventions to create. In Zero to One shows how we can find singular ways to create those new things.

Thiel begins with the contrarian premise that we live in an age of technological stagnation, even if we are too distracted by shiny mobile devices to notice. Information technology has improved rapidly, but there is no reason why progress should be limited to computers or Silicon Valley. Progress can be achieved in any industry or area of business. It comes from the most important skill that every leader must master: learning to think for yourself.

Zero to One presents at once an optimistic view of the future of progress in America and a new way of thinking about innovation: it starts by learning to ask the questions that lead you to find value in unexpected places.

Peter discusses “copying” with disdain, but I think not all “copying” is just copying, a lot of progress happens via semi-continuous improvements. This civilization does not only progress by one-off disruptive inventions. A lot of it is steady improvements. And these improvements occasionally lead to enabling Zero to One (or dominating) developments.

His most provocative thesis declares that “competition is for losers” and entrepreneurs should embrace monopolies. This is an ingenious framing device, just controversial enough to arouse debate, but commonsense enough to make an incrementalist acknowledge its virtue.

Thiel is not suggesting that capitalism is bad. He’s saying that, precisely because capitalism is wonderful for consumers, it’s hell for companies. Truly competitive industries, like restaurants, see their profits eroded by competitors and fickle eaters.

Every start-up must begin small before getting big. Entrepreneurs should at first seek to dominate a small market. In other words: They should try to build a mini-monopoly.

Peter asks “What company is nobody building?” this question has some charm, but I think it too is misleading. Well, maybe nobody is building this “company X” yet, because it is not yet fully enabled. eg. voice over internet existed in the lab (IBM?) since mid 70’s, but Skype made sense only much later when lots of people got access to personal computers and these computers started being connected to the Net all the time.

Bottom line: it is not all “zero to one”, nor it can be or should be.

Rating:

8/10

This book fluctuates between brilliance and madness. When it focuses on the mechanics of start-ups, it’s brilliant. When it focuses on Thiel’s philosophies and contrarians, it’s a bit whacky. Thiel enjoys being a contrarian too much.

Doing something new and valuable may require being a contrarian, but just being contrarian doesn’t mean your ideas are new and valuable.

It is worth reading but be prepared to skim and shake your head.

I still give the book 8/10 as I enjoyed its thought provoking character; it was an engaging reading: disagreeing, agreeing, learning new perspectives.

That being said, he is a bit self-indulgent in certain parts of the book, perhaps his choice as a self-made billionaire (I don’t know) and more importantly he spends a lot of time focusing on all the great achievements of his inner circle. There is in fact more life beyond Silicon Valley. Read it, but don’t glorify it.

Highly recommended but please don’t treat it as Gospel 🙂

Some of the quotes from the book:

  • “Brilliant thinking is rare, but courage is in even shorter supply than genius.”
  • “The most contrarian thing of all is not to oppose the crowd but to think for yourself.”
  • “All failed companies are the same: they failed to escape competition.”
  • “Monopoly is the condition of every successful business.”
  • “Customers won’t care about any particular technology unless it solves a particular problem in a superior way. And if you can’t monopolise a unique solution for a small market, you will be stuck with vicious competition.”
  • “Today’s “best practices” lead to dead ends; the best paths are new and untried.”
  • “The perfect target market for a start-up is a small group of particular people concentrated in a group but served by few or no competitors,”
  • “Nerds are skeptical of advertising, marketing, and sales, because they seem superficial. They know their own jobs are hard, so when they look at salespeople laughing on the phone with a customer or going to two-hour lunches, they suspect that no real work is being done. If anything, people overestimate the relative difficulty of science and engineering, because the challenges of those fields are obvious. What nerds don’t realise is that it also takes hard work to make sales look easy… If you have 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.”
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About Roche Mamabolo

Entrepreneur, Author, Dad. Passionate about Innovation and Creativity, Books, Poetry, Traveling, Theatre, Art, Music.
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One Response to Book Review: Zero To One – Notes on Startups or How to Build the Future by Peter Thiel

  1. Pingback: My Top 20 Books for 2015 | rochemamabolo

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