The Road doesn’t have to be infinite. Take the Hidden Paths.

The ever-evolving Indian start-up ecosystem has made it the world’s 3rd largest start-up ecosystem after the US and China. As of 2019, India hosts over 25 unicorn start-ups (Valuation over USD 1 bn) with Ola Electric (a spin-off from Ola), Rivigo (Value), Druva, Delhivery, Dream11, and Big Basket gaining the unicorn status in 2019.

About the Author-

PayPal co-founder Peter Theil also co-founded Palantir (backed by CIA-backed), and Founders Fund. He was one of the first investor’s companies like Facebook, SpaceX, and LinkedIn. Zero to One provides insights into Peter Theil’s (author) entrepreneurial journey, strategies to unlock the power of innovation, and how should start-ups thrive.

About Zero to One-

The title Zero to One focuses on growth. According to Peter, growth can either be horizontal – adding value to something that already exists (1 to n) or vertical – innovating and creating something that doesn’t exist (0 to 1).

It’s all about timing-

Peter talks about one of his first ventures Paypal, an online payments company which replaced cash with electronic wallets. When talking about Paypal, Theil explains the importance of ‘Timing’ and how they seized the opportunity and raised funds just before the dot-com bubble popped.

Innovation creates monopolies and vice versa-

Entrepreneurs should embrace monopolies and build proprietary tech at least 10x better than the closest competitor to gain the last mover advantage i.e. creating the last development and enjoying monopoly profits. Competition limits innovation forces companies to focus on their rivals and caps their profitability.

Survival of the fittest and how to get fit-

Peter then describes ‘Power Law of Venture Capital’ and stresses that the “spray and pray” approach (diversification) affects the entire portfolio. A diversified portfolio effectively aims to hedge the risks (losses by the companies that failed) against the rewards (value created by a few companies). Hence, as a rule of thumb, Venture Capitalists should back only those companies that have the potential to generate value greater than the entire fund (0 to 1). One of Silicon Valley’s best venture capital firms, Andreessen Horowitz invested USD 0.25 mn in Instagram in the year 2010 and netted USD 78 mn when Facebook acquired Instagram 2 years later. Befitting its reputation, Andreessen achieved a 312x return on its investment in less than two years. However, the fund size of Andreessen Horowitz is USD 1.5 bn. Hence, VC’s must back companies with massive potential to scale with each resource available to make phenomenal returns. The business version of the contrarian premise states that every successful business has a secret that is important to the company and unknown to the outside world.

Marriages may be made in heaven, but good partnerships are made by winners-

A company is only as good as its team, thus laying a solid foundation since the very inception of a start-up begins with partnering with the correct co-founder to avoid an ugly divorce. Additionally, it is necessary to keep the core team closely knit and allocating responsibilities based on the strengths of each individual.

Touching the hearts and pockets of millions-

Entrepreneurs often underestimate the importance of marketing/ sales, which is closely linked to how the company will scale in the future. To dominate a niche, and then channeling its success to generate future cash flows, it is imperative for every company to ace at least one channel of distribution.

A human touch in a world of technology-

In the book, Peter also touches upon how technology has changed our way of life and its potential effect in the future. The purpose of creating better technology was to complement humans and help them do things efficiently, not replace them. Theil co-founded Palantir in 2004 with this very principle using a hybrid man-machine solution to identify financial fraud and terrorist networks. In 2019, Pitchbook pegged its valuation at USD 20 bn. Thus, combined efforts would yield results that would dramatically benefit the entire society.

Knowing in and out-

Lastly, entrepreneurs should be able to answer questions related to their Engineering, Timing, Monopoly, People, Distribution, Durability, and the Secret.

In his concluding remarks, Theil mentions that it is difficult to predict over 20 or 30 years, but optimistically hopes that we would go from *Zero to One.