Title: Zero to One
Author: Peter Thiel, Blake Masters
Type: #litnote #book #todevelop

It's easy to copy an existing model. But to make something new, thats useful and better than what is previously available is hard. The future will fail unless it creates something new and better than what we have today.

Zero to one talks about building companies that create new things. The early investor in Facebook, founder of paypal and investor in SpaceX and many other ventures.

Success formula doesn't exists in enterpreneurship. Everything is new and unique.

"What important truth do very few people agree with you on?". The question is easy but its harder to answer. Your answer must be something new, something unpopular.

Moreover you have to have courage. Courage is shorter in supply than genius.

The future looks different than today. If its same as today, its not future. Most of the answers to answering this question are as close as we can come to looking into future.

• Globalization: Copying the existing technology and making it available to larger group. What china is doing currenty to the world. Going from 1 to n
• Technology: Going from 0 to 1. Globalization can't survive with the same technology. The earth doesn't have so much resources. Therefore we need advancement in technology. New things to be built if we want a better future.

Dot-com crash taught following lessons

• Make incremental advances
• Stay lean and flexible
• Improve on competition
• Focus on product, not sales.
  Yet, the opposite principles are more correct probably:
• It is better to rish boldness than triviablity
• A bad plan is better than no plan
• Competitive market destroy profits
• Sales matter just as much as product

Contrarian truth may be found by answering the question: What do most people believe about the world? But don't oppose the crowd for the sake of it. The most contrarian thing of all is not to oppose the crowd but to think for yourself.

Monopoly lies and Competitive lies

• Monopolists lie to protect themselves. They protect themselves from invitations to others. Google is a prime example of this. Lying allows to easily escape the unwanted attention.
• Non-monopolists lie by telling they are monopolists. The exaggarate their distinction from competition.

Competitive businesses not only lack profits but this type of ecosystem also pushes peoople towards ruthlessness or death.

But a monopoly can affford to think about other things than just making money. In business money is either an important thing or everything. And monopoly profits allow businesses to transcend the struggle for survival.

Monopoly capitalism

Monopolies drive progress because they can provide a powerful incentive to innovate. Monopolist companies thrive by solving a unique problem. And failed companies failed to escape competition.

The Ideology of competition

Competition brings no profits. There is struggle for survival. While creative monopoly on the other hand allows benefits to everybody.

Our education system teaches us to compete. Students who don't perform well by sitting in the classroom are made to feel somehow inferior. While the ones who excel the test and assignments are treated differently.

War and peace

• People fight because they are different. They have different ideas and goals.

Last Movers Advantage

Escaping competition gives you a monopoly but only if it can endure in the future. The value of a company today is the sum of all the money it will make in the future.

Technology companies lose money for the first few years. It takes time to build valuable companies which means delayed revenue. Most tech companies true value is in the future. The most important questions that you should be asking yourself as an enterpreneu is: Will this business still be around a decade from now? You have to focus long-term.

Characteristics of a Monopoly

• Proprietary technology
  • This makes it difficult or impossible for competitors to replicate your business.
  • As a good rule of thumb, proprietary technology must be at least 10x better than its closes substitute.
  • Peopld don't care about marginally better products.
  • To build 10x better technology is to invent something completely new.
  • Only when you are 10x better than the nearest competition, you can escape competition.
• Network effects
  • Your initial market should be small and should scale from there on with the help of network effects.
• Economics of scale
  • A great monopoly should have the potential to scale at large number.
• Branding
  • Creating a strong brand is a powerful way to claim monopoly. But it alone is not enough. It should be backed by the product.

Building monopoly

• Start small and monopolize
  • Monopoly dominates a large share of its market. But every startup starts with a very small market.
  • Once you create and dominate your niche market, then you can gradually expand into the related and broader market.
• Don't disrupt
  • Disruption attracts attention. It invites trouble. Try to avoid competition as much as possible.

The Last Mover Advantage

• If you are early, you can capture the significant part of the market share. But moving first is a tactic, not a goal.
• The last mover also has an advantage that it can come along and unseat you.

Is your life a lottery ticket

• Is future a matter of chance or design?
• Do you fear the future or welcome the future?
• We don't value long-term planning. We see as if the world is random. But with careful planning, a lot can be done. And businesses with good definite plans will always be underrated in a world where people see the future as random.

Follow the money

Compounding is the eight wonder of the world. Most of us will be forgotten. But small minorities achieve disproportionate results. We don't live in a normal world. We live under a power law. The parteo's 80-20 principle.

The returns in life are not normally distributed. Some of our projects will fail. Some wil stay flat and some will give us exponential results. Power law distributions hide in plain sight.

Power law is not just important to investors but to everybody. Because every individual is undeniable an investor.

The education system teaches us that "it doesn't matter what you do, as long as you do it well". But it does matter what you do.

You have to focus on things that you are already good at. You have to think what will be valuable in the future. And what's valuable is rarely obvious. And relentlessly puruse that thing.

Secrets

Most of the ideas that we have today were once secrets. The question doesn't make any sense if there are no secrets at all.

But there are many things we don't know.

If there are many secrets left to be discovered in the world, there is a lot of companies to be built and a lot of wealth to be generated.

We act as if there aren't any secrets left to discover. Society tells us there are no secrets left. There are no spaces on earths geography. There are no new places to go and discover. Explorers are only found on the history books.

We are taught to move gradually from early age. We won't get credit for overachieving. But doing only what's told to do will give us an A.

Secrets can be wrong sometimes or can't go mainstream. And people are afraid of being wrong. They don't want to be seen alone even if they are right.

People delude themself with questions like: If there were secrets, why wouldn't any one else have discovered.

He asks questions on how to build successful companies. And not just in building companies. We can use this idea in order to improve our lives.

Because our lives in itself is a business. We are the investors. And knowing these secrets give you an edge to receive disproportionate results.

A world where there are no secrets left to discover would have a perfect balance. No injustice. Everyone living in harmony together.

The case for secrets

The fact about secrets is that you can't find secrets without looking for them. There are many truths left to discover. We will never know about these secrets unless we demand to know about them. We have to force ourselves to look around.

Only when you look beyond the conventional truths, you will see the secrets. These secrets will provide you opportunities.

How to find secrets

There are secrets about people and secrets about nature. Secrets about people are underappreciated.

The best place to look for secrets is where no one else is looking. If you want to find secrets, you have to look beyond the conventional wisdom. Anything that you have been taught is not secret.

Finding secrets is not easy. You will have to work for it. But once you find them, you can get tremendous edge over the rest of the people.

Foundation

Every great businesses must get right from the beginning. You need great foundations. Bad decisions from early on can take on a wrong road.

• Founding matrimony
  • The founders should match. Choosing a co-founder is like choosing a marriage partner
• Onwership, possession, & Control
• On the bus or of the bus
  • All in or all out
• Cash is not king
  • Cash is attractive but it is more about the present than future
• Vested Interests
  • Equity in the company.

Do one thing

You have to distinguish yourself sharply by your work. Eliminate competition by doing the one thing that you do the best.

Sales

You need a distribution no matter how good your system is. Customers will not come when you build it. You will have to work hard for it. Sales is hard work. The best sales is hidden. It appears as if it is not sales. And this requires large amount of work.

We all are salesman. We all have something to sell. And sales work on all of us.

Man and machine

30 years from now, will there be something left for people to do. Futurists think that the answer is 'Yes'. People are worried about being replaced by computers who work better than they do. But the most valuable companies wil be built by those who seek to empower people rather than replace them.

Globalization means substitution while technology means complemetarity. Complementarity between computers and humans is the path to building a great business. Use of computers to help humans solve the hard problems.

As we develop new technology, they won't just get better at things people already do; they'll help us to do what was previously unimaginable.

Questions every business must answer

• Is your technology 10x better?
• Is now the right time?
• Are you starting with a big share of a small market?
• Do yo have the right team?
• Do you have a way to deliver your product?
• Will your product be available 10 years into future?
• What is the secret you know about?

They Myth of Social enterpreneurship

When you do something different that's truly good for society, it allows you to build a monopoly business. The best problems to work on are often the ones nobody else tries to solve

The Founder's Paradox

We need founders who can should be more tolerant and who seem a little strange and extreme. Those who can lead companies.

Stagnation or singularity?

Think for yourself. Only by seeing the world as new, fresh and as strange as a new born sees, we can re-create and preserve it for the future.