“Zero to One” by Peter Thiel: Part One

  1. What important truth do very few people agree with you on?
  2. What makes the future distinctive and important isn’t that it hasn’t happened yet, but rather that it will be a time when the world look different from today. In this sense, if nothing, about our society changes for the next 100 years, then the future is over 100 years away. If things change radically in the next decade, then the future is nearly at hand.
  3. When we think about the future, we hope for a future of progress. That progress can take one of two forms. Horizontal or extensive progress means copying things that work—going from 1 to n. Horizontal progress is easy to imagine because we already know what it looks like. Vertical or intensive progress means doing new things—going from 0 to 1. Vertical progress is harder to imagine because it requires doing something nobody else has ever done. If you take one typewriter and build 100, you have made horizontal progress. If you have a typewriter and build a word processor, you have made vertical progress.
  4. The single world for horizontal progress is globalization—taking things that work somewhere and making them work everywhere. China is the paradigmatic example of globalization; its 20-year plan is to become like the United States is today.
  5. The single word for vertical, 0 to 1 progress is technology. The rapid progress of information technology in recent decades has made Silicon Valley the capital of “technology” in general. But there is no reason why technology should be limited to computers. Properly understood, any new and better way of doing things is technology.
  6. Spreading old ways to create wealth around the world will result in devastation, not riches.
  7. It’s hard to develop new things in big organizations, and it’s even harder to do it by yourself. Bureaucratic hierarchies move slowly, and entrenched interests shy away from risk. In the most dysfunctional organizations, signaling that work is being done becomes a better strategy for career advancement than actually doing work (if this describes your company, you should quit now).
  8. If you can identify a delusional popular belief, you can find what lies hidden behind it: the contrarian truth.
  9. Make incremental advances.
  10. Anyone who wants to change the world should be more humble. Small, incremental steps are the only safe path forward.
  11. There are big lessons from the dot-com crash that still guide business thinking today:
    1. Stay lean and flexible.
    2. Improve on the competition. Don’t try to create a new market prematurely. The only way to know you have a real business is to start with an already existing customer, so you should build your company by improving on recognizable products already offered by successful competitors.
    3. Focus on product, not sales. If you product requires advertising or salespeople to sell it, it’s not good enough.
  12. The opposite principle are probably more correct to be successful:
    1. It is better to risk boldness than triviality.
    2. A bad plan is better than no plan.
    3. Competitive markets destroy profits.
    4. Sales matters just as much as product.
  13. “Perfect competition” is considered both the ideal and the default state in Economics 101. So-called perfectly competitive markets achieve equilibrium when producer supply meets consumer demands. Under perfect competition, in the long run no company makes an economic profit.
  14. Americans mythologize competition and credit it with saving us from socialist bread lines. Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away.
  15. Competition is an ideology—the ideology—that pervades our society and distorts our thinking. We preach competition, internalize its necessity, and enact its commandments; and as a result, we trap ourselves within it—even though the more we compete, the less we gain.
  16. Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past.
  17. If you’re less sensitive to social cues, you’re less likely to do the same things as everyone else around you.
  18. Sometimes you do have to fight. Where that’s true, you should fight and win. There is no middle ground: either you don’t throw any punches or strike hard and end it quickly.
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