Zero to One (Peter Thiel)


Many things have been written about Peter Thiel’s book, Zero to One, and I thought it was about time I should read it. Thiel is interesting because he and I have so many similarities: we both studied philosophy in college, we both went to law school, we both clerked for a judge, we both worked in a law firm, we are both chess masters, and we both went on to found a company and make billions of dollars. Ok, the last two are not true. I do love chess, but given the way I’m playing recently, the likelihood of me being a chess master is probably less than my likelihood of becoming a billionaire. Given our similarities, though, Peter Thiel has paved the way for me. Perhaps there is Thiel-like success in my future, too.

Thiel’s book, co-written with Blake Masters, is derived from notes that Masters took during a course that Thiel taught in 2012 at Stanford on startups. The title of the course, “Computer Science 183: Startup,” would not have convinced me to take it during law school. It may not even convince me today. But now I’m glad we have the book because Thiel’s wisdom can be spread to the hoi polloi that did not attend an obscure-sounding course at Stanford Law School in 2012. On to the book…

The book outlines seven questions for every business, which are worth repeating here:Image result for zero to one

  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 particular 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?
  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 and 20 years into the future?
  7. The Secret Question–Have you identified a unique opportunity that others don’t see?

These are all worthwhile questions, and Thiel does an admirable job of identifying why each of them must be answered affirmatively for a successful business. The two questions that hit me the hardest were the first, third, and seventh. The other questions have been asked many times before. Jim Collins wants you to get the right people on the bus. Everyone knows this is necessary to building a good team and a good business. But for me, the most striking questions were about the impact your business will have.

In the Engineering Question, Thiel asks whether you are changing the game, improving the world, or, in Seth Godin‘s phrase, “causing a ruckus.” If your business does not bring something new to the world, it is at best an incremental improvement of some old technology. That may be useful and good for the world, but it does not create a breakthrough. The auto industry has made many improvements since the Model T, but Tesla changed the conversation altogether.

The Monopoly Question also made me think. This is the idea that you need to be a big fish in a small pond, to be the major player in a market. To do this, you get into the market late and take over. What I struggle with here, and with the Secret Question, is not the question or theory itself. I understand and agree with those. What is difficult is finding that market, identifying a unique opportunity. I’m a lawyer. I went to school, I listened, I studied, I got good grades. I’m a self-described “rule-follower.” So for me, it is particularly difficult to break out of the mold–or even think of a business that may be outside the norm enough so as to be useful and to have monopoly potential. I keep thinking, but it is difficult.

Thiel’s book, I think, should be read in conjunction with the Manifesto of his company, Founders Fund. The Manifesto discusses specific opportunities and developments in specific industries that help to round out Thiel’s discussion in Zero to One.

I’ve been thinking for some time now of how I can start a business and break out of the work-a-day world to do something really great. Thiel helped clarify a lot of things for me and I think this is a worthwhile read for anyone in the same position. If you are thinking of creating a business or finding ways to improve your current business, put Zero to One on your reading list and see how you can implement the principles in your own life.


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