0 to 1

This post is part of <a href="http://laurentmaumet.com/books">a series</a> of posts about book I've read. My objective in these posts is not to do a complete summary of the book, but more to give you an idea of the content and why you should read it. They are also memos I use to remind myself what I've read.

Book title : "0 to 1 - Notes on startups, or how to build the future"

Author : Peter Thiels


Peter Thiel is is a co-founder of PayPal, Palantir Technologies and Founders Fund . In this book he gives his view on how to create a new successful business :

  • to be a real game changer, a new business is nit a copy of an existing one. The Idea has to be totally new. From 0 to 1. Not from n to n+1.

  • monopoly is key. The new business has to be so new that it will be a monopoly.

The book is very practical and full of anecdotes and real examples.

My notes

Doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1. > >
Today our challenge is to both imagine and create the new technologies that can make the 21st century more peaceful and prosperous than the 20th. > >
Positively defined, a startup is the largest group of people you can convince of a plan to build a different future. > >
This pessimistic undercurrent drove then-president Bush 41 out of office and won Ross Perot nearly 20% of the popular vote in ’92—the best showing for a third-party candidate since Theodore Roosevelt in 1912. > >
Under perfect competition, in the long run no company makes an economic profit. > >
Monopolists can afford to think about things other than making money > >
Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. > >
All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition. > >
children, it cost Microsoft and Google their dominance: Apple came along and overtook them all. In January 2013, Apple’s market capitalization was $500 billion, while Google and Microsoft combined were worth $467 billion. Just three years before, Microsoft and Google were each more valuable than Apple. War is costly business. > >
Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding. > >
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. > >
As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible. > >
Eroom’s law—that’s Moore’s law backward—observes that the number of new drugs approved per billion dollars spent on R&D has halved every nine years since 1950. > >
Biotech is difficult because we didn’t design our bodies, and the more we learn about them, the more complex they turn out to be. > >
progress without planning is what we call “evolution.” > >
Making small changes to things that already exist might lead you to a local maximum, but it won’t help you find the global maximum. > >
Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best. > >
When Yahoo! offered to buy Facebook for $1 billion in July 2006, I thought we should at least consider it. But Mark Zuckerberg walked into the board meeting and announced: “Okay, guys, this is just a formality, it shouldn’t take more than 10 minutes. We’re obviously not going to sell here.” > >
In 1906, economist Vilfredo Pareto discovered what became the “Pareto principle,” or the 80-20 rule, when he noticed that 20% of the people owned 80% of the land in Italy > >
Remember our contrarian question: what important truth do very few people agree with you on? > >
All fundamentalists think this way, not just terrorists and hipsters. Religious fundamentalism, for example, allows no middle ground for hard questions: there are easy truths that children are expected to rattle off, and then there are the mysteries of God, which can’t be explained. > >
When a cheap laptop beats the smartest mathematicians at some tasks but even a supercomputer with 16,000 CPUs can’t beat a child at others, you can tell that humans and computers are not just more or less powerful than each other—they’re categorically different. > >
And that’s the point: computers are tools, not rivals. > >
Why do so many people miss the power of complementarity? > >
But when indefinitely optimistic investors betting on the general idea of green energy funded cleantech companies that lacked specific business plans, the result was a bubble. > >