The title of this book Zero to One is a reference to companies which create something new and how difficult it is to move from 0 to 1, as opposed to going from 1 to n which is building on the pre-existing or the familiar.
Peter Thiel was a co-founder of Paypal and has sat on the board at Facebook. He is a Billionaire who invests in startup companies through his venture capital fund and so it’s safe to say he knows what he’s talking about when it comes to starting companies.
This book is a series of chapters which don’t really flow into each other but rather then are like observations on different areas of business which Peter has made through his career. Some of them go against conventional wisdom.
In my opinion the last few paragraphs of chapter seven on pages 90-92 are the most insightful of the whole book. It explains about the power law and how that is against conventional thinking.
A few of the things I found interesting which he touches on are:
In his views what makes a successful venture capitalist fund is to find the one or two companies which can grow to give a return larger than the fund itself.
On page 154 he covers 7 questions which every successful business should have the correct answers to. He relates it to the cleantech bubble, the renewable energy technology which all crashed around 2010 and how it went wrong.
The foundations of a company and how useful it is to distinguish between who has ownership, possession and control. When it comes to control, large boards of directors can be inefficient with a board of 3 directors optimal and no more than 5.
Without a doubt, anyone that runs or is thinking of starting a company up should read this book. In fact as I was writing this review I kept looking back to parts to reference it and I realise I definitely need to read it again. Before starting a business.
Favourite quotes from the book:
Brilliant thinking is rare, but courage is in even shorter supply than genius. – Page 5
How much of what you know about business is shaped by mistaken reactions to past mistakes? – Page 22
Winning is better than losing, but everybody loses when the war isn’t worth fighting. – Page 40
The value of a business today is the sum of all the money it will make in the future. – Page 44
To succeed, “you must study the endgame before everything else” – Page 58
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… only invest in companies that have the potential to return the value of the entire fund. – Page 86
Department’s 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 you must think hard about whether it will be valuable in the future. – Page 91
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? – Page 103
Every great business is built around a secret that’s hidden from the outside. – Page 106
There are a few things that every business must get right at the beginning, a startup messed up at its foundation cannot be fixed. – Page 107
“A company does better the less it pays the CEO” – page 113
Anyone who prefers owning a part of your company to being paid in cash reveals a preference for the long term and a commitment to increasing your company’s value in the future. – page 116
No company has a culture; every company is a culture. – page 119
Why a recruit should join your company instead of many others, answers about your mission and answers about your team… why you’re doing something important that no one else is going to get done. – page 121
Whoever is first to dominate the most important segment of a market with vital potential will be the last mover in the whole market. – page 137
Huge markets are highly competitive, not highly attainable. – Page 160
What will the world look like 10 and 20 years from now, and how will my business fit in? – Page 163
Great companies have secrets: specific reasons for success that other people don’t see. – Page 165
An entrepreneur can’t benefit from macro scale insight unless his own plans begin at the micro scale. – Page 170
A valuable business must start by finding a niche and dominating a small market. – Page 171
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. – Page 189
The ancients saw all of history as a never ending alternation between prosperity and ruin. – page 191.
Overall: 85%