“Zero to One is about how to build companies that create new things…The single most powerful pattern I have noticed is that successful people find value in unexpected places, and that they do this by thinking about business from first principles instead of formulas.”
Thiel divides the world into four: an axis of pessimism and optimism, and an axis of future-definite and future-indefinite. Entrepreneurs, he argues, rely on future-definite thinking: they believe the future can be predicted and so work to shape it. Much of the US, however, has fallen to optimistic/future-indefinite thinking. They believe the future will be better, but have no idea how or why, and so don’t bother to prepare other than to get general skills and knowledge, a process that culminates in becoming a lawyer, consultant, or banker. Thiel recommends the opposite: pick one valuable skill or area, specialize carefully, and double down to achieve enormous success.
Zero to One is Thiel’s hymn to entrepreneurs and innovators, those individuals who don’t just achieve incremental improvements (one to two), but manage a real step change in technology, going from zero to one.
In truth, for me there are a couple of points I don’t think he’s entirely thought through. He waxes eloquent about monopolies, for example, arguing that they are the best way to run a business: “the more we compete, the less we gain.” I completely agree, I’m just a little worried his ‘we’ only includes businesses, not the consumers, who take it in the shorts. That said, monopolies may also provide more resources for innovation, so the question is not as simple as economics 101 might argue. His advice to specialize the same: he’s wholly correct that if you want to be a billionaire that’s the way to go, but he doesn’t seem to have considered that it’s a high-risk strategy. The returns are so high precisely because of the enormous number of people who will fail utterly as a result.
In some ways, the book is interesting because of these weak points: it tells us what Peter Thiel, the billionaire co-founder of Paypal, believes. Paypal’s team has also achieved great things: 7 of the early employees have founded billion dollar businesses, from Youtube to Tesla to LinkedIn. It’s a success so noted that they’re sometimes referred to as the Paypal Mafia in the tech world. The team was clearly doing something right!