Peter thiel writes his book Zero to One, putting his experience of building, executing and selling startups. Not just that, he invested into and worked with some of the most influential founders and startups from across the globe.
Zero to One lays out a guide to build successful profit making business monopolies that are also good for the society. in a way makes it possible for us to look forward to a future that would be one with much less problems, at least for humans.
Define an authentic vision
According to Thiel, it all starts a definitive and an authentic vision of a founder that has the strength of being wrong. Sam Altman recently wrote in one of his blogs about the strength of being wrong, about how as Individuals we “should trade being short-term low-status for being long-term high-status, which most people seem unwilling to do.” Sometimes as individuals we need to question the existence of inefficiencies irrespective what other people think of us.
“Brilliant thinking is rare, but courage is in even shorter supply than genius.”
Elon musk started off SpaceX with a vision of reusing every rocket multiple times and consequently make it possible to establish life on the planet mars. The word “multiple” in that time wasn’t even considered by most people because they were too stuck up in thinking about how can someone reuse a rocket or even worse to imagine life on mars. He wasn’t just thinking of making something better but actually thinking of being a 100 times better. Similar questions were raised on Steve Jobs when he came out with the first smart phone that we all use today almost every minute. People like them come on this planet often and question things that otherwise would have been left as they are. That’s progressing towards a better future.
Does it make you wonder, how do we really end up progressing? It’s by asking the right questions.
Think of progress; think of questions
He writes about progressing toward the future, vertically and horizontally. Vertically, where a person comes up with a forward looking Invention (say a vaccine or a smartphone) and the other when the masses start using it.
Vertical progress happens when people ask questions about the future, and as Sam Altman rightly said —
as long as you are right, being misunderstood by most people is a strength not a weakness. You and a small group of rebels get the space to solve an important problem that might otherwise not get solved.”
But just this thought of progressing forward is not enough. If you really want to design something for the future, you should be able to analyze and view the present critically. The ability to think critically lies underneath every genius brain. Apple has always made something that we can use today while giving us products that were difficult to imagine when they were actually launched.
Pick a niche and don’t get bored until you ace it
When Elon musk joined Tesla he was focused on producing a motor vehicle that’s powered by the Sun and beats every other vehicle in competition. And he did just that. He produced Tesla Roadster that would compete with the then best sports cars. What was the progress here? It was powered by the Sun. Nobody had done it before. GM had failed to launch an electric car for years. Tesla not only launched an electric car, they gave us a Sports car that matches the expectations of its consumer. Today, they do better than matching the expectations. They beat their competition by a mile, when it comes to rapid innovation. Back then, they simply picked one market and aced it. Instead of worrying about how this will be done for the masses or a thousand other details.
Are monopolies really that bad?
In School, I had learnt that Monopolies are generally bad for the consumers. They mean lesser choices. They went on to say that the government should intervene into a situation where a company holds a monopoly.
Thiel questions the status quo in his book by speaking out for Monopolies. He gives a simple reason to protect Monopolies instead of killing them. They encourage companies to come up with better solutions by giving them pricing power, economies of scale and consequently greater profit margins.
Whether they are good for the society or not, is debatable. Similar to the question of whether social media is good or bad or of the use of technology in refereeing football matches. Its debatable but would reveal itself in the coming years.
Thiel also points to how good businesses or monopolies actually come up when they produce something that others can’t copy, and keep pursuing it rigorously. Apple for example, for years have came up with new hardware that has never been thought of. It’s not just the way Steve Jobs presented his products but also the products that they could imagine, which others just couldn’t. This is also the reason Tesla is so highly valued by the market even though they don’t make as much money as their competitors. They think differently and drive markets towards higher highs with their products for the future. According to Thiel, these ideas might seem like they have vanished or that there are no new ideas to be had but that’s just a misconception. There’s always room for innovation.
Start small but always think bigger
Amazon started off by JUST selling books, Tesla started with JUST a sports car, Zomato was JUST about restaurant reviews, Facebook was JUST an online service for students to judge the attractiveness of their fellow students, Pinterest was JUST a collection of hobbies.
All of them picked up their markets, and then expanded bit by bit. Today, they are all as big as you can imagine something to be. It takes time to build monopolies that would outlast time. The goal should be to deliver services to your customers that beat the competition, not just today but every day for years to come.
Products don’t sell themselves
So many of us think of the word salesperson in a negative sense. Vertical progress without a good sales strategy might work for aliens or dogs. But not for us humans. Every entrepreneur needs to think of sales. In fact, most of us need to sell something first before handing it over to someone else. It also introduces us to what the consumer really wants.
Airbnb founder Brian Chesky went door to door to sell and on board property listings. Steve Jobs got on stage to launch every product himself. Pinterest founder went to random people sitting in coffee shops to show them how Pinterest works. Warren buffet used to make money in his childhood by charging rent money to allow kids to play games on pinball machines he bought with his savings. Everybody needs to sell.
To summarize the book that leaves me with hope for a better world. An entrepreneur needs to sell a definitive vision for the future by making something exceptional today that would lead to a better tomorrow. All happy businesses are unique: each one earns a monopoly by solving a unique problem and can’t be copied. And it goes without saying, a better tomorrow can only be achieved by a team of people thinking on their feet, a culture that embraces innovation, and pursues it rigorously.