Monday, February 8, 2016

Notes from Zero to One by Peter Thiel

"Zero to One: Notes on Startups, or How to Build the Future" by Peter Thiel has been one of the better books that I've read recently. It not just gives a perspective about startups and businesses, but there are some interesting things about life in general. Following are a few excerpts from the book.

“The smartphones that distract us from our surroundings also distract us from the fact that our surroundings are strangely old:”

“Creating value is not enough—you also need to capture some of the value you create.”


Competition

“Under perfect competition, in the long run no company makes an economic profit.”

“Competition means no profits for anybody, no meaningful differentiation, and a struggle for survival.”

“Professors downplay the cutthroat culture of academia, but managers never tire of comparing business to war.”

“The two houses are alike, yet they hate each other. They grow even more similar as the feud escalates. Eventually, they lose sight of why they started fighting in the first place.”

“Inside a firm, people become obsessed with their competitors for career advancement. Then the firms themselves become obsessed with their competitors in the marketplace. Amid all the human drama, people lose sight of what matters and focus on their rivals instead.”

“Competition can make people hallucinate opportunities where none exist.”

“Winning is better than losing, but everybody loses when the war isn’t one worth fighting.”

“Sometimes you do have to fight. Where that’s true, you should fight and win.”

"Only when your product is 10x better can you offer the customer transparent superiority."


“once you’re 10x better, you escape competition.”

“No technology company can be built on branding alone.”

Disruption

“Disruption also attracts attention: disruptors are people who look for trouble and find it.”

“Disruptive companies often pick fights they can’t win.”

“moving first is a tactic, not a goal. What really matters is generating cash flows in the future,”

“to succeed, “you must study the endgame before everything else.”

“Every company starts in unique circumstances, and every company starts only once.”

“To an indefinite optimist, the future will be better, but he doesn’t know how exactly, so he won’t make any specific plans.”

“In philosophy, politics, and business, too, arguing over process has become a way to endlessly defer making concrete plans for a better future.”

“In exchange for better insurance contracts, we seem to have given up the search for secrets about longevity.”

“Every living thing is just a random iteration on some other organism, and the best iterations win.”

“you can change the world through careful planning, not by listening to focus group feedback or copying others’ successes.”


Secrets and the power law

“we don’t live in a normal world; we live under a power law.”

“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.”

“Every individual is unavoidably an investor, too. When you choose a career, you act on your belief that the kind of work you do will be valuable decades from now.”

“you cannot run dozens of companies at the same time and then hope that one of them works out well. Less obvious but just as important, an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve.”

“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.”

“If you think something hard is impossible, you’ll never even start trying to achieve it.”

“Belief in secrets is an effective truth.”

“The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers.”

“Unless you have perfectly conventional beliefs, it’s rarely a good idea to tell everybody everything that you know.”


Startups

“Startup messed up at its foundation cannot be fixed.”

“As a founder, your first job is to get the first things right, because you cannot build a great company on a flawed foundation.”

“he who is not busy being born is busy dying.”


Hiring and Selling

“Recruiting is a core competency for any company. It should never be outsourced.”

“Everybody has a product to sell—no matter whether you’re an employee, a founder, or an investor. It’s true even if your company consists of just you and your computer. Look around. If you don’t see any salespeople, you’re the salesperson.”

“most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.”


Data and technology

“Today’s companies have an insatiable appetite for data, mistakenly believing that more data always creates more value. But big data is usually dumb data.”

“A great technology company should have proprietary technology an order of magnitude better than its nearest substitute.”


Social Entrepreneurship

“Social entrepreneurs aim to combine the best of both worlds and “do well by doing good.” Usually they end up doing neither.”


Valuable Business

“An entrepreneur can’t benefit from macro-scale insight unless his own plans begin at the micro-scale.”

“valuable business must start by finding a niche and dominating a small market.”


And finally...

“Our task today is to find singular ways to create the new things that will make the future not just different, but better”

You can check out more about the book here.