Zero to One summary

Vertical progress is more difficult to achieve than horizontal progress because you have to think of something that doesn’t exist yet and that will meet a future need. As a start-up founder, you have to be able to predict the future, and you can only do that if you’re able to view the present critically. Thiel believes that this is such a crucial ability that, in job interviews, he asks candidates, “What important truth do very few people agree with you on?” Why? Because only a person who can think outside established conventions can see and change the future.

Imagine you have completed your thorough analysis of the potential the future holds for you. The next step is: focus.

Many people believe that competition is the ideal economic stimulus since it encourages companies to improve on each other’s products. But it’s actually monopolies that drive innovation.

When people hear the word monopoly they tend to think of large, evil companies unfairly squeezing out the competition. But if you have a monopoly, it doesn’t necessarily mean the competition is being treated unfairly. It can also show that you’re doing something very well – so well, in fact, that your competition just can’t survive. If that’s the case, it’s probably due to the fact that you’ve created something new that no other company can copy.

That was a lot of theory. Now, let’s take a deep breath and put the theory to work. In the next five chapters, we’ll give you five pieces of advice on how to turn your startup into a successful monopoly. You need a vision, a secret, persistence, a strong culture, and an outstanding sales strategy.

What do you think makes a typical start-up founder? Sure, many founders are adventurous, they’re passionate, but there’s something else. What we’re looking for here is the special ingredient, the secret sauce. In fact, founders – especially those of successful companies – are, well, a bit strange. Consider PayPal’s founding team: almost every member was a bit of an oddball. In fact, as teenagers, four of them even had the unusual hobby of building bombs.

You need originality in your founding team. That’s important because founders do far more than just starting a company and hiring people: they provide a vision. But a vision is something that you can’t just come up with by following a step-by-step guide from a business handbook. It has to be connected to unique personalities who bring their unique ideas to life.

Let’s be honest: if you search for ways to make vertical progress, it’s easy to be discouraged. We live in a high-tech world that’s already filled with so many life-changing inventions. Sometimes it feels like there aren’t any new ideas to be had. But that’s not true.

In fact, the world still has plenty of secrets – things that are important but which most people don’t know about. Or, if they knew about them, they wouldn’t be interested in them. Sure, that makes them hard to discover because you’re on your own and you have to defeat a lot of skepticism. But it’s not impossible.

PayPal was founded in 1998 by Max Levchin, Luke Nosek, and the author, Peter Thiel. In the early days, it didn’t make any profits. In fact, when Thiel calculated the value of the company in 2001, he found that most of it came from profits that didn’t even exist yet, profits that were expected to come in more than ten years! And, as we know now, the company did make a lot of profit later.

The key message here is that it can take years for a start-up to become profitable. But even if the company doesn’t initially make profits, it can still have value, because value is determined by the profits it will make over its entire lifespan. If you’ve founded a start-up, you can’t expect to be top dog in your business from the get-go. You need to be prepared to stick around for the long run.

When you start out on the long road of building up a business, the first days are crucial. You have to create a strong culture where people support and believe in each other. For example, at PayPal, the team was so close that many of them even went on to start new companies together.

Now, typically, start-ups are so small that every single person on the team plays an important role. That’s why before making an investment in a company, it’s helpful to not only analyze the skills and vision of the people involved but also their personal connections.

Innovative products are worthless unless they’re sold. Still, many founders are enthusiastic about technology. That’s a good thing, but it has a downside. Tech enthusiasts would often prefer to work on product innovation all the time – and they don’t want to spend their time on sales. But they should.

So, what does it take to improve your sales?

Here’s a story from Silicon Valley. Between 2005 and 2009, an investment bubble was at its height. The underlying industry was clean technology, or “cleantech” – products and services that promote things like the sustainable use of natural resources and the use of renewable energy sources. Sounds like a great opportunity, right? Well, thousands of companies started in this industry, financed by over $50 billion in investments. But since then, many companies have gone under. It goes without saying that they took their investors’ money with them.

So why did they fail? Because their executives were starry-eyed. They simply didn’t analyze the market opportunity well enough. Here are a few examples: