Thoughts on “Zero to One”, a book by Peter Thiel
Zero to One is a short book that starts with the phrase “How to build the future”, and is a concise guide to doing just that… as long as your idea of building the future is of founding start-ups which monopolise as-yet unknown or underexploited markets.
The key premise of the book centres around the purported fact that entering a competitive market isn’t a very good idea and that no matter what your proposed USP or incremental gain you can offer, you’re never going to be very successful (read: make very much money). Instead, it proposes that you should aim to monopolise markets, by “going from 0 to 1”, i.e. go from no capability to your capability i.e. find a niche and fill it.
The book goes through some tips on how to create such a monopoly and draws on some experiences from the author (one of the co-founders of Paypal – the first online transfer application, and Palantir, both >$1billion businesses). The key starting point is to start with the question “what valuable company is nobody building?”, and build a start-up around that – a niche that no-one has yet identified. He even gives a basic framework for formulating such ideas (pg103), but don’t expect to come up with an Uber or Facebook eureka moment during the chapter (well, I certainly didn’t!). He also argues that at this starting point, you have to get the foundations right, as things need to done right the first time – and gives a 7 step guide to doing this (pg153).
Once up and running, Thiel starts to talk about the “Power Law”, which becomes another important theme of the book. He casts away the age-old adage of “not putting all of your eggs in one basket”, dismissing our jack-of-all-trade-master-of-none school educations, and states that once we identify our strength (or company, or investment opportunity) it makes sense to invest all of our time/effort/resource into it, to maximise the gain, rather than spread betting.
The latter parts of the book talk about the future and briefly touches on some of the key questions of whether we’ll plateau in our progress, progress indefinitely, be replaced by superhuman AI, or wipe ourselves out by nuclear war/climate change or any other number of eventualities. He also talks about his views on artificial intelligence & improving IT, stating his position in the “will computers/AI substitute for humans or compliment us?” firmly on the complementarity side. He cites his own experiences in the way Paypal monitors for credit card fraud (which, at least in 2014, required human & machine complementarity) as proof for this, but I am left wondering whether he still believes as strongly in this viewpoint 4 years on, when the AI world seems to be taking quantum steps on an almost yearly basis.
As a Doctor, with very little background in Economics, I found the book a pretty accessible and easy read, and it introduced me to quite a few economic/business concepts I was unaware of.
Easy and fairly enjoyable read, introducing some interesting concepts of how to build a monopolising (or dramatically failing) start-up for the non-business(wo)man, and a (possibly slightly out of date) look ahead to the future.