A Few of my Favorite Quotes from Peter Thiel’s Zero to One

We are going to discuss the book at Chennai Open Coffee Club today. So I decided to take all the fragments I marked up from the the book and share it in this post. Hopefully, we will get to most of them in our book club discussion. I apologize that these quotes do not have much of a context or selected based on some criteria. I resonate with most of them and puzzled by a few. Here it goes:

This book is about the questions you must ask and answer to succeed in the business of doing new things: what follows is not a manual or a record of knowledge but an exercise in thinking. Because that is what a startup has to do: question received ideas and rethink business from scratch.

  • E VERY MOMENT IN BUSINESS happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.
  • Unless they invest in the difficult task of creating new things, American companies will fail in the future no matter how big their profits remain today.
  • The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative.
  • In a world of scarce resources, globalization without new technology is unsustainable.
  •  it’s hard to develop new things in big organizations,
  • Positively defined, a startup is the largest group of people you can convince of a plan to build a different future.
  • If you lose sight of competitive reality and focus on trivial differentiating factors— maybe you think your naan is superior because of your great-grandmother’s recipe—your business is unlikely to survive.
  • In the real world outside economic theory, every business is successful exactly to the extent that it does something others cannot.
  • a great business is defined by its ability to generate cash flows in the future.
  • Simply stated, the value of a business today is the sum of all the money it will make in the future .
  • Most of a tech company’s value will come at least 10 to 15 years in the future.
  • As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage.
  • network effects businesses must start with especially small markets.
  • successful network businesses rarely get started by MBA types: the initial markets are so small that they often don’t even appear to be business opportunities at all.
  • Beginning with brand rather than substance is dangerous.
  • Every startup is small at the start. Every monopoly dominates a large share of its market. Therefore, every startup should start with a very small market. Always err on the side of starting too small. The reason is simple: it’s easier to dominate a small market than a large one . If you think your initial market might be too big, it almost certainly is.
  • The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
  • future: is it a matter of chance or design?
  • Instead of pursuing many-sided mediocrity and calling it “well-roundedness,” a definite person determines the one best thing to do and then does it.
  • Boom produced a generation of indefinite optimists so used to effortless progress that they feel entitled to it.
  • fascination with statistical predictions – statistical predictions of what the country will be thinking in a few weeks ’ time than by visionary predictions of what the country will look like 10 or 20 years from now.
  • A startup is the largest endeavor over which you can have definite mastery. You can have agency not just over your own life, but over a small and important part of the world. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.
  • never underestimate exponential growth.
  • After all, less than 1% of new businesses started each year in the U.S. receive venture funding, and total VC investment accounts for less than 0.2% of GDP. But the results of those investments disproportionately propel the entire economy. Venture-backed companies create 11% of all private sector jobs. They generate annual revenues equivalent to an astounding 21% of GDP. Indeed, the dozen largest tech companies were all venture-backed. Together those 12 companies are worth more than $ 2 trillion, more than all other tech companies combined.
  • EVERY ONE OF TODAY ’S most famous and familiar ideas was once unknown and unsuspected.
  • Companies are like countries in this way. Bad decisions made early on— if you choose the wrong partners or hire the wrong people , for example— are very hard to correct after they are made. It may take a crisis on the order of bankruptcy before anybody will even try to correct them.
  • advertising doesn’t exist to make you buy a product right away; it exists to embed subtle impressions that will drive sales later.
  • It’s better to think of distribution as something essential to the design of your product. If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business— no matter how good the product.
  • Superior sales and distribution by itself can create a monopoly, even with no product differentiation.
  • The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.
  • But the most valuable companies in the future won’t ask what problems can be solved with computers alone. Instead, they’ll ask: how can computers help humans solve hard problems?
  • The Engineering Question Can you create breakthrough technology instead of incremental improvements? 2. The Timing Question Is now the right time to start your particular business? 3. The Monopoly Question Are you starting with a big share of a small market? 4. The People Question Do you have the right team? 5. The Distribution Question Do you have a way to not just create but deliver your product? 6. The Durability Question Will your market position be defensible 10 and 20 years into the future? 7. The Secret Question Have you identified a unique opportunity that others don’t see?
  • Customers won’t care about any particular technology unless it solves a particular problem in a superior way.
  • cleantech executives were running around wearing suits and ties. This was a huge red flag, because real technologists wear T-shirts and jeans.
  • never invest in a tech CEO that wears a suit
  • An entrepreneur can’t benefit from macro-scale insight unless his own plans begin at the micro-scale.
  • No sector will ever be so important that merely participating in it will be enough to build a great company.
  • But a valuable business must start by finding a niche and dominating a small market.
  • O F THE SIX PEOPLE who started PayPal, four had built bombs in high school. Five were just 23 years old— or younger. Four of us had been born outside the United States.
  • IF EVEN THE MOST FARSIGHTED founders cannot plan beyond the next 20 to 30 years, is there anything to say about the very distant future?

And then, as it usually happens, I discovered this one

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Dorai

Building Bots. Dabbling in DataScience. Loving Learning and Thrilled about Teaching.