Zero to One book - Briefed in 30 points

A.???About the book:

·??????Book Category(ies): Business, Startups

·??????Book Subject: Notes on Startups / How to build the future

·??????Book Author: Peter Thiel with Blake Masters

·??????Author(s) in word:

Peter Thiel: is an entrepreneur and investor, he started PayPal in 1998, led it as CEO, and took it public in 2002 when eBay bought it with value $1.5B. In 2004 he invested in FaceBook where he serves as a director and in the same year he launched Palantir Technologies company which specialized in Big Data analytics. Also he has provided early funding for spaceX, LinkedIn, Yelp, and dozens of successful technology startups.

o??Blake Masters: was a student at Stanford Law School in 22012 when his detailed notes on Peter’s class “computer Science 183: Startup” became an internet sensation. He went on to co-found Judicata, a legal research technology startup.

·??????Published year: 2014?

B.????Main Ideas:

·??????Technology allows us to do more with less.

·??????The future progress is in one of two forms; horizontal form when copying things that work to go from 1 to n – in one word “globalization” like China doing now, or Vertical progress form when doing new things to go from 0 to 1 – in one word “technology”.

·??????According to the resource scarcity, globalization without technology is unsustainable.

·??????Monopoly is the condition of every successful business because it can keep innovation running and make the long-term plan to finance the ambitions research projects.

·??????Competitive markets destroy profit because the competitive business goes beyond lake of profit like fight hard to survive, pay employees only minimum wage, and may be hire unqualified people or grandpa to decrease the cost.

·??????Creative monopoly means new products that benefit everybody and sustainable profits for the creator, but competition means no profit for anybody and struggle for survive.

·??????Every monopoly is unique, but they usually share some of the following 4 characteristics:???

1. Proprietary Technology: must be at least 10 times better than its closet substitute and the clearest way is to invent something completely new.

2. Network effects: make a product more useful as more people use it like facebook if all your friends are in facebook it makes sense for you to join it.

3. Economies of scale: software companies can enjoy it because the marginal cost of producing another copy of the product is close to zero.

4. Branding: creating a strong brand is a powerful way to claim a monopoly like Apple as a Tech brand.

·??????To build a Monopoly business:

1. Start small: start with a very small market to be easier to dominate it then go gradually expand into related and slightly broader markets as amazon started with selling books online.

2. The last will be first: it’s much better to be the 1st mover, is to make a great development in a specific market and enjoy years or even decades of monopoly profit, as Jose Raul said: you must study the endgame before everything else.

3. Have a concrete plan and vision for your company: in July 2006, Mark Zuckerberg didn’t accept yahoo offer to buy facebook for $1 billion because he saw where could take the company.

4. The power law: monopoly businesses capture more value than millions of undifferentiated competitors, that’s mean you could have 100% of the equity if you fully fund your own venture, but if you fails you’ll have 100% of nothing but if you own just 0.01% of google, you will have more than $35 million as this writing in 2014.

5. Search for a secret: to get a new business idea believe in secrets because they are many more secrets left to find but they will yield only to relentless searchers, there is more to do in science, medicines, engineering, and in technology of all kinds.

·??????It’s very hard to go from 0 to 1 without a team, you need good people and a structure as well to keep everyone aligned for the long term.

·??????The smaller the board, the easier for directors to communicate, to reach consensus, and to exercise effective oversight, so a board of 3 is ideal and should never exceed 5 people unless your company is publicly hold.

·??????On the bus or off the bus: part time employees and hiring consultant s don’t work, even working remotely should be avoided as you can because misalignment can creep in whenever colleagues aren’t together full time and in true same place everyday.

·??????Cash is attractive for employees but high cash compensation teaches them to claim value from the company as it already exists instead of investing their time to create new value in the future, so cash bonus is slightly better than cash salaries.

·??????Startups don’t need to pay high salaries because they can offer part of ownership of the company itself, and the 1st 4 or 5 employees might be attracted by large equity stakes or high profit shares.

·??????Sales is very important: superior. Sales and distribution by itself can create a. Monopoly even with no product differentiation, but the converse is not true.

·??????In general, the higher the price of your product, the more you have to spend to make a sale and the more it takes sense to spend it.

·??????Your company needs to sell more than its products, you must also sell your company to employees, media, and investors.

·??????In between personal sales (salespeople obviously required) and traditional advertising (no salespeople required) there’s ad Emad zone which is the distribution doldrums.

·??????Whatever your industry, any great business plan must address every one of the following 7 questions:

1. The engineering question: Can you create breakthrough technology instead of incremental improvements?

2. The timing question: Is now the right time to start your business?

3. The monopoly question: Are you starting?with a big share of a small market?

4. The people question: Do you have the right team to start?

5. The distribution question: Do you have a way to not just create but deliver your product?

6. The durability question: Will your market position be defensible 10 or 20 years into the future?

7. The secret question: Have you identified a unique opportunity that others don’t see?

·??????There is a shortage in founders’ traits worldwide, so we need unusual individuals to lead companies beyond mere incrementalism, founders are important not because they are the only ones whose work has values, built rather because a great founder can bring out the best work from everybody at his company.

·??????The future of superhuman artificial intelligence called singularity is near and the task today is to find singular ways to create the new things that will make the future not just different but better to go from 0 to 1, and the essential 1st step is to think for yourself only by seeing our world anew, as fresh and strange as it was to the ancients who saw it first.

C.????Conclusion:

·??????If you want to get sustainable profit, invest in a unique monopoly company by buying stocks in it or by establishing a new one and avoid competition so mush as possible.

·??????Your 1st job is to get the 1st things right because bad decisions made early on – such as choosing wrong partners or hiring wrong people – are very hard to correct after they made.

·??????Technology and monopoly is the way to create a unique business with a sustainable profit and the technology is the one way for us to escape competition in a globalization world.

·??????It’s very hard to go from 0 to 1 without a team, so build your time, compensate them, gather them in a good work environment, and engage them to add new values for your company and for themselves accordingly.

·??????Invest in sales, distribution, and marketing because your unique product is not enough to sell itself.?