Zero to One is an instant classic that any aspiring business owner should read in 2015. Peter Thiel breaks down large ideas and provides very convincing explanations for them throughout his book. I am currently in the middle of a few other business books that I haven’t finished yet, but I tore through Zero to One in a few days.
The one takeaway
The most important takeaway from the book is something often repeat by Thiel: that we should focus on solving big problems that currently don’t have a solution. He supports this idea in many different ways. One angle is to think about one truth that you hold to be absolutely true that most people would disagree with. Another supporting idea is that if you plan on improving something that already exists, you need to make your product 10x better, not 3x better. A third supporting idea is that there are secret problems hidden in plain sight that we have to dig to find. Airbnb and Uber solve problems that were hidden in plain sight, but took a bit of thinking and discovery to uncover.
Innovation throughout the past few decades
One of his big points in the book is the claim that society innovated from the Rennaisance through the 1960s and has fallen flat since then. I believe he has a lot of good reasons for this, but I’m not wholly convinced. Thiel is close to Silicon Valley and all the innovations with the internet, but clearly he still believes that we have not seen substantial technological improvements in the past few decades.
Worldwide optimism and pessimism
One unique and potentially inflammatory section of the book highlights the optimism and pessimism of different parts of the world. In the 1950s and 1960s the United States public believed in definite optimism – that the future was bright and there is a definite plan to get there. Kennedy’s plan to put a man on the moon is a good example of this. In the present day, the United States believes in indefinite optimism – the future is bright, but we don’t have a plan on how to get there. Present day Europe is indefinitely pessimistic, and present day China is in a state of definite optimism. This categorization is very general, but very interesting at the same time.
Sales vs Engineers
As a marketing person with a slight amount of coding skills, I really like Thiel’s explanation on the importance of sales. It’s a common debate and reaction from developers – the idea that sales and marketing people are useless. Thiel names this idea as a problem and provides reasons why.”In Silicon Valley, nerds are skeptical of advertising, marketing, and sales because they seem superficial and irrational. But advertising matters because it works. It works on nerds, and it works on you.” Developers are used to transparency in their work and knowing instantly whether their work is successful or not. Sales and marketing on the other hand involves changing perceptions rather than changing the core product. Engineers point at marketers spending money on advertising, or salespeople taking clients to two-hour lunches as a waste of resources, but Thiel points out that “what nerds miss is that it takes hard work to make sales look easy.”
The most refreshing ideas
The idea that having a bad plan rather than no plan is refreshing. He makes an argument in a way clearly against some main ideas from The Lean Startup. That we should have a business plan rather than just going for something and pivoting. He doesn’t directly address pivoting in the book.
How it has impacted me
Instead of thinking incrementally and hoping to take a small slice of a bigger market, this book has inspired me to be bolder and look for large problems that need to be solved. At the same time, Thiel doesn’t recommend taking on a huge market segment, but serving a very specific marketing and growing outward from there. The best example of this was Facebook serving Harvard students first, then other Ivy Leagues, then colleges across the U.S., then eventually anyone with an email address.
The second most important idea was the concept of how venture capital worked. That venture capitalists realize their portfolio will contain a very small amount of huge hits, but that every company they evaluate has to have the potential of being a huge hit. So a VC will only want to fund companies that they believe can one day be a huge hit like Uber or Dropbox. He states that not everybody should start their own company, and it might make sense to join a fast growing startup rather than starting your own because of this concept. That it’s better to own a small part of Google than 100% of your own unfunded idea that goes nowhere. This idea was not deeply explained, and I still have problems with it, but it was still impactful.
A Lucid Treatise
Peter Thiel’s writing style is very clear, concise, and convincing. He builds the case for a lot of his ideas, even while jumping back and forth between global macro trends and specific startup advice. He intertwines quotes from Shakespeare and references to Einstein throughout. The fact that he barely has a Twitter account and not huge body of public writings makes this book even more valuable, as it gives insight into the mind of one of the Valley’s top VC’s and founders in a way that hasn’t been seen before. I’m going to start reading it for a second time very soon.