Zero to One
March 02, 2019
Zero to One: Notes on Startups, or How to Build the Future
Peter Thiel and Blake Masters
Highlights (second read, June 2020)
Any generation excepting our parents' and grandparents' that is: in the late 1960s, they expected this progress to continue. They looked forward to a four-day workweek, energy too cheap to meter, and vacations on the moon. But it didn't happen.
But it's hard to blame people for dancing when the music was playing; irrationality was rational given that appending ".com" to your name could double your value overnight.
However, the world's millions of PalmPilot users
weren't concentrated in one place
, the future will be better than the present if he plans and works to make it better.
Whether you were born in 1945 or 1950 or 1955, things got better every year for the first 18 years of your life,
and it had nothing to do with you
But perhaps you can't understand Malcolm Gladwell without understanding
historical context as a boomer (born in 1963)... a whole generation learned from childhood to overrate the power of chance and underrate the importance of planning.
Finance epitomizes indefinite thinking because it's the only way to make money when you have no idea how to create wealth.
You can have agency not just over your own life, but over a small and important part of the world. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.
...life is not a portfolio
This is the classic trichotomy of the easy, the hard, and the impossible.
To say that there are no secrets left today would mean that we live in a society with no hidden injustices.
If you think something hard is impossible, you'll never even start trying to achieve it.
Since your time is your most valuable asset, it's odd to spend it working with people who don't envision any long-term future together. If you can't count durable relationships among the fruits of your time at work, you haven't invested your time well—even in purely financial terms.
You can tell that humans and computers are not just more or less powerful than each other—they're categorically different.
Highlights (first read, March 2019)
What important truth do very few people agree with you on?
My own answer to the contrarian question is that most people think the future of the world will be defined by globalization, but the truth is that technology matters more.
New technology has never been an automatic feature of history. Our ancestors lived in static, zero-sum societies where success meant seizing things from others.
Because that is what a startup has to do: question received ideas and rethink business from scratch.
At least PayPal had a suitably grand mission—the kind that post-bubble skeptics would later describe as grandiose: we wanted to create a new internet currency to replace the U.S. dollar.
We gave new customers $10 for joining, and we gave them $10 more every time they referred a friend.
How much of what you know about business is shaped by mistaken reactions to past mistakes? The most contrarian thing of all is not to oppose the crowd but to think for yourself.
The airlines compete with each other, but Google stands alone. Economists use two simplified models to explain the difference: perfect competition and monopoly.
Google’s motto—“Don’t be evil”—is in part a branding ploy, but it’s also characteristic of a kind of business that’s successful enough to take ethics seriously without jeopardizing its own existence.
Monopolists can afford to think about things other than making money; non-monopolists can’t.
Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate.
Monopoly is the condition of every successful business.
It’s hard to say how much would be different, but the opportunity costs were enormous. All Rhodes Scholars had a great future in their past.
These companies totally lost sight of the wider question of whether the online pet supply market was the right space to be in. Winning is better than losing, but everybody loses when the war isn’t one worth fighting.
Warren Buffett famously considers himself a “member of the lucky sperm club” and a winner of the “ovarian lottery.”
If you believe your life is mainly a matter of chance, why read this book? Learning about startups is worthless if you’re just reading stories about people who won the lottery.
A definite person determines the one best thing to do and then does it. Instead of working tirelessly to make herself indistinguishable, she strives to be great at something substantive—to be a monopoly of one.
The strange history of the Baby Boom produced a generation of indefinite optimists so used to effortless progress that they feel entitled to it. Whether you were born in 1945 or 1950 or 1955, things got better every year for the first 18 years of your life, and it had nothing to do with you.
The very character of government has become indefinite, too. The government used to be able to coordinate complex solutions to problems like atomic weaponry and lunar exploration. But today, after 40 years of indefinite creep, the government mainly just provides insurance; our solutions to big problems are Medicare, Social Security, and a dizzying array of other transfer payment programs.
The best investment in a successful fund equals or outperforms the entire rest of the fund combined.
Indeed, the dozen largest tech companies were all venture-backed. Together those 12 companies are worth more than $2 trillion, more than all other tech companies combined.
Every university believes in “excellence,” and hundred-page course catalogs arranged alphabetically according to arbitrary departments of knowledge seem designed to reassure you that “it doesn’t matter what you do, as long as you do it well.” That is completely false. It does matter what you do. You should focus relentlessly on something you’re good at doing, but before that you must think hard about whether it will be valuable in the future.
In a democratic society, a wrongful practice persists only when most people don’t perceive it to be unjust. At first, only a small minority of abolitionists knew that slavery was evil; that view has rightly become conventional, but it was still a secret in the early 19th century. To say that there are no secrets left today would mean that we live in a society with no hidden injustices.
So when thinking about what kind of company to build, there are two distinct questions to ask: What secrets is nature not telling you? What secrets are people not telling you?
Aaron Levie, the CEO of Box, was always careful to pay himself less than everyone else in the company—four years after he started Box, he was still living two blocks away from HQ in a one-bedroom apartment with no furniture except a mattress.
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.
If you can’t count durable relationships among the fruits of your time at work, you haven’t invested your time well—even in purely financial terms.
People are so used to exaggerated claims that you’ll be met with skepticism when you try to sell it. Only when your product is 10x better can you offer the customer transparent superiority.
Tesla built a unique brand around the secret that cleantech was even more of a social phenomenon than an environmental imperative.
Only Ken Howery fit the stereotype of a privileged American childhood: he was PayPal’s sole Eagle Scout. But Kenny’s peers thought he was crazy to join the rest of us and make just one-third of the salary he had been offered by a big bank. So even he wasn’t entirely normal.
Apple's value crucially depended on the singular vision of a particular person. This hints at the strange way in which the companies that create new technology often resemble feudal monarchies rather than organizations that are supposedly more “modern.”
We cannot take for granted that the future will be better, and that means we need to work to create it today.
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