Successful people and businesses find value in unexpected places. Review and Summary of Peter Theil's Zero to One.
The core take away from this book is that the best and most disruptive companies go “from zero to one,” from non-existence to existence, from no solution to solution, from nothing expected to something expected. Most companies, though, go from 1 to 1.1, or 1.1 to 1.11, they don’t make a huge disruptive change. To have a lasting impact, you must find a zero and create a new paradigm.
“Today’s “best practices” lead to dead ends; the best paths are new and untried.”
Going from zero to one means going from nothing to something. This is the greatest leap possible — greater than going from one to 10 or even from one to 100.
To go from zero to one is to conjure up something into existence from the dark void of oblivion. This is the essence of true innovation.
In Zero to One, Peter Thiel, offer ideas and suggestions for technology start-ups. Unlocking the power of innovation is the primary goal. In order to reach this goal, the entrepreneur will need to question conventional wisdom, embrace monopoly and capture value for their new enterprise.
One example of Peter’s unique reasoning is his enthusiastic embrace of monopoly. Competition, he explains, is not the social good we were all taught, it squelches innovation.
Monopoly, on the other hand, has the potential for positive effects. When a company knows it can earn a termed monopoly via patents and similar methods, the firm is motivated to invent new technology, which benefits society. He is quick to state that monopolies can be misused by the greedy, but he doesn’t linger on this point.
There are two different kinds of progress. Horizontal progress occurs from copying things that work. It’s going from one to N, so that if you have a typewriter and then you build 100 more, you’ve achieved horizontal progress. Vertical progress is achieved by doing something wholly new. It means going from zero to one. This kind of progress is hard to imagine, because it’s something that’s never been done before. If you have a typewriter and then you build a word processor, you’ve achieved vertical progress.
Globalization — taking things from one place and applying them everywhere else — is horizontal progress. Vertical progress comes from technological breakthroughs, and “technology,” by the way, doesn’t just describe computers. Any new way of doing things can be called technology. Globalization and technology are two different kinds of progress that might or might not happen concurrently. You can have one type without the other, you can have both, or maybe neither of them. Between the two kinds, technology will be the defining force of the future.
Innovative monopolies generate profits and create new products that benefit society. Competition limits innovation and profits. We have been indoctrinated to believe that it’s a positive force, but competition is an ideology that doesn’t serve us very well. Our culture reinforces this ideology, but that doesn’t make it any truer.
Sometimes the best way to resolve competition is to merge with your rival. Peter Thiel and Elon Musk were rivals until they both realized that the dotcom bubble presented a greater threat than either of them. So, they merged. It was difficult to turn their rivalry into a partnership, but they overcame that challenge.
Information technology has become so dominant that it has become synonymous with the very word “technology.” Computers continue to grow in power. Many functions once performed by humans have been taken over by computers. Some predict that this process will accelerate, and computers will continue take over more and more human functions.
People worry about computers replacing people, that a process mirroring that of globalization is taking place. Just as jobs were lost to workers in other countries, they will now be lost to computers.
In conclusion, People need not worry that this will happen, however. While people in one part of the world aren’t so different from people in another part of the world, computers are very different from people. They do not require the same provisions. Their capabilities are different. The kinds of things that people are good at aren’t the same as the things that computers are good at. People can make complex decisions. Computers are good at processing large amounts of data.
Computers are tools. The big technological advances of the future will happen in computers complementing — not replacing — people. We shouldn’t be afraid that computers will replace us.
People and computers combined can do tasks better than either one can by themselves. This presents business opportunities. At PayPal, they developed a system for detecting credit card fraud that involved algorithms that flagged suspicious transactions which would then be reviewed by human operators. This demonstrates how the abilities of computers and people can complement one another.