A couple days ago I finished reading Peter Thiel’s excellent book Zero to One.
For those who are not familiar with Peter Thiel he is a billionaire co-founder of PayPal, the first private investor in Facebook, an early investor in SpaceX, and very involved in startups as a Partner of the Founders Fund.
The sub-title of Thiel’s book is Notes on Startups, or How to Build The Future.
Indeed Peter’s predictions have been very on point.
During the recent U.S. election Peter donated over a million dollars to the now President Elect Donald Trump’s campaign, despite plenty of backlash of criticism from Clinton’s supporters.
Trump success in getting elected President is yet another proof how Thiel’s seemingly contrarian ways of thinking often turn out to be right.
Here are seventeen powerful ideas from Zero to One that can help you succeed in business by being a part of a revolutionary startup.
1. Capitalism and competition are opposites.
Capitalism is the acquisition of capital. Profit is capitalistic.
2. Competition drives down profits.
When competition increases profits decrease.
3. Differentiate and strive to achieve a monopoly.
Superior distribution or sales can help you gain a monopoly position within a market.
4. Drastic improvements are necessary to dominate a market.
Incremental improvements invite competitors to imitate and are easy to compete with.
To dominate a market your product must be more than a bit better: It must be significantly better than the existing solution.
5. Competition is an ideology.
Competition rather than individual accomplishment is often praised in schools.
6. Invent a new type of company and create a monopoly.
What valuable company is nobody building?
Creation of a new product or market that achieves monopoly is often far more profitable than competing in an existing market.
7. Superior reputation and differentiation
The more different you are, the less competition you will have. And with less competition the profits are often greater.
8. Start small then scale.
Startups striving for massive success should start with a very small market, dominate it, then scale up with adjacent markets.
Tesla has mastered this approach and used it to expand and dominate the Electric Car market in North America and most of the world.
Elon Musk’s master plan for Tesla is an awesome example of the start small then scale model…
The Tesla master plan shows this well, here it is:
- Create a low volume car, which would necessarily be expensive
- Use that money to develop a medium volume car at a lower price
- Provide solar power.
Find a low volume, high price way to position yourself in your market and this will help give you the capital you need to take your business to the next level.
9. Don’t disrupt.
Disrupting a market can lead to disaster.
Jusk look at what happened to Napster after they disrupted the music industry.
Don’t be like Napster, avoid disruption and competition as much as possible.
10. What you do does matter.
Thinking that “It doesn’t matter what you do so long as you do it well” is completely false.
It absolutely does matter what you do.
Choose something you’re good at, and that will be valuable in the future.
11. Change the world.
A great company is a conspiracy to change the world.
All happy companies are different (The title of Chapter 3)
Ask yourself: What valuable company is nobody building?
12. Think 10x.
Companies must strive to create breakthrough technology that is 10x better because incremental improvements are not enough to create transparent superiority since many customers are used to exaggerated claims.
13. The best sales strategies are hidden.
Founders of the most successful startups in silicon valley wear jeans and a t-shirt.
If a CEO looks like a salesman he’s probably bad at sales and worse at tech.
14. Frame the truth in your favor.
Monopolies to appear as actors in a competitive market to protect themselves.
Google, for example, has a clear U.S. search advertising monopoly, however when the U.S. search advertising industry was just $17 billion, the mere 3.4% of the $495 billion annual global advertising market makes Google look like just another advertising competitor in that frame.
With the Android platform and phones like the Nexus and Pixel, Google (a subsidiary of Alphabet Inc.) is able to frame itself as a tech company, even though Android accounts for a very small percentage of the $964 billion Worldwide consumer tech market.
Framing your business within a larger context can help you avoid the penalties of a monopoly while enjoying the profits.
15. It is better to risk boldness than triviality.
It takes boldness to be different.
Be bold and take risks if you want to reap the rewards.
16. If you fail to plan you plan to fail.
A bad plan that you can improve on is better than no plan at all.
17. Sales matters just as much as product.
Sales often matters more.
Without sales it is very difficult to scale.
With plenty of sales scaling becomes much easier and it becomes easier to attract investments as well.
If you are interested in startups or if you have any ambitions to get involved in the potentially super profitable startup space I highly recommend you grab yourself a copy of Zero to One and give it a read.