About the book

I found this book after Slush in 2016. It didn’t fit into my agenda right after Slush, but was interested to learn his ideas about entrepreneurship. And because he is keen supporter of president Trump. This book is based on his lectures in Stanford University.

What was the book like?

Peter Thiel has an excellent story to tell. Basically he reflects his learnings from startup times of PayPal. Thiel is not explaining about a venture that starts to import some goods to a local market. He is telling a story about the unicorns. Everything he writes tries to explain how to build a successful new venture that didn’t exist before. He also reflects the times of the dot-com boom – before and after. Not forgetting to mention Princes “So tonight I’m gonna party like it’s 1999”.

What are the key learnings of the book? 

Thiel starts with a mysterious question by asking from a startup entrepreneur “what important truth do very few people agree with you on?”. For the investor the question is “what valuable company is nobody building?”. And behind these questions lies his key lesson. Startup solves secrets which are not shared.  

Zero to One

–      Thiel sees that technology enables progress from zero to one. It is intensive progress that will utterly change the way things are. Like PayPal did by introducing email-based payment system. Information technology and communications enables the startups thinking business from scratch. Search engine companies (i.e. Google) are great examples of this.

Startup in a nutshell:

–      Beginnings are special for countries and companies. Get the first things right.

–      Founding matrimony is crucial. Co-founder is like spouse and conflicts are like divorce. It helps if founders have a prehistory.

–      Divided ownership, possession and control. And the ideal board is made of three persons.

–      On the buss or off the buss. Everybody should share the same roof.

–      Cash is not king in startup salaries, ownership is.

–      No to equal shares, but yes to everybody getting their fair share. Vested interests keeps people committed.

–      Extending the founding keeps the company lean and agile as long as possible.

Four big lessons from the dot-com crash.

–      Make only incremental advances. It creates safety for the future. Or “You should not put all-in like Boo.com did” as it was stated in the Medici effect book.

–       Stay lean and flexible means that unplanned helps to change course and iterate when needed.

–      Improve on the competition means that you should be focused on the existing customer, not to new markets that does not exist.

–      Focus on product, not sales.

Every startup should aim to build a monopoly.

–      Start with a very small market like PayPal did.

–      Build proprietary technology like Google’s search algorithms.

–      Create network effects like Facebook did with Harvard MBA students.

–      Target for the economies of scale

–       Do branding like Apple.

The last will be first

–       Try to be the last that will make the great development. Sounds iffy, but if your timing is right this advise might turn you big. If, if and if…

How should we change according to the book?

Thiel explains it. Less than 1 % of new businesses receive venture funding in the U.S. Total VC investments are less than 0,2 % of GDP. Venture funded companies create 11 % of all private sector companies. And the revenues are 21 % of the GDP. Twelve largest technology companies are all venture funded. These dozen companies are worth 2 trillion USD. More than rest of the technology companies all together.

What should I personally do? 

“Everyone of today’s most famous and familiar ideas was once unknown and unsuspected”.

Summary

In great many ways Peter Thiels learnings are worth to be published in a book. I can recommend the Zero to One-book to be used in seminars and in courses to underline certain factors which must be done right when building a startup. 

The book in six words: Do more with less, do 0 to 1.