# Zero to One  ## Metadata - Author: [[Peter Thiel, Blake Masters]] - Full Title: Zero to One - Category: #books ## Highlights - The act of creation is singular, as is the moment of creation, and the result is something fresh and strange. ([Location 49](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=49)) - successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas. ([Location 68](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=68)) - Horizontal or extensive progress means copying things that work—going from 1 to n. Horizontal progress is easy to imagine because we already know what it looks like. Vertical or intensive progress means doing new things—going from 0 to 1. Vertical progress is harder to imagine because it requires doing something nobody else has ever done. ([Location 95](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=95)) - In a world of scarce resources, globalization without new technology is unsustainable. ([Location 123](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=123)) - Startups operate on the principle that you need to work with other people to get stuff done, but you also need to stay small enough so that you actually can. Positively defined, a startup is the largest group of people you can convince of a plan to build a different future. ([Location 142](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=142)) - The most contrarian thing of all is not to oppose the crowd but to think for yourself. ([Location 278](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=278)) - Creating value is not enough—you also need to capture some of the value you create. ([Location 283](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=283)) - The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business. ([Location 306](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=306)) - In business, money is either an important thing or it is everything. Monopolists can afford to think about things other than making money; non-monopolists can’t. ([Location 383](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=383)) - Economists copied their mathematics from the work of 19th-century physicists: they see individuals and businesses as interchangeable atoms, not as unique creators. Their theories describe an equilibrium state of perfect competition because that’s what’s easy to model, not because it represents the best of business. ([Location 412](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=412)) - Monopoly is the condition of every successful business. ([Location 421](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=421)) - All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition. ([Location 423](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=423)) - it’s competition, not business, that is like war: ([Location 459](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=459)) - Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past. ([Location 481](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=481)) - Winning is better than losing, but everybody loses when the war isn’t one worth fighting. ([Location 500](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=500)) - If you can’t beat a rival, it may be better to merge. ([Location 519](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=519)) - Sometimes you do have to fight. Where that’s true, you should fight and win. There is no middle ground: either don’t throw any punches, or strike hard and end it quickly. ([Location 530](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=530)) - As a good rule of thumb, proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage. ([Location 595](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=595)) - Software startups can enjoy especially dramatic economies of scale because the marginal cost of producing another copy of the product is close to zero. ([Location 629](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=629)) - Many businesses gain only limited advantages as they grow to large scale. Service businesses especially are difficult to make monopolies. ([Location 630](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=630)) - No technology company can be built on branding alone. ([Location 658](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=658)) - Every startup is small at the start. Every monopoly dominates a large share of its market. Therefore, every startup should start with a very small market. ([Location 662](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=662)) - The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors. ([Location 672](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=672)) - The most successful companies make the core progression—to first dominate a specific niche and then scale to adjacent markets—a part of their founding narrative. ([Location 695](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=695)) - As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible. ([Location 717](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=717)) - if you expect an indefinite future ruled by randomness, you’ll give up on trying to master it. ([Location 762](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=762)) - Process trumps substance: when people lack concrete plans to carry out, they use formal rules to assemble a portfolio of various options. ([Location 764](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=764)) - The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined. ([Location 1044](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1044)) - once you think that you’re playing the lottery, you’ve already psychologically prepared yourself to lose. ([Location 1060](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1060)) - An entrepreneur cannot “diversify” herself: you cannot run dozens of companies at the same time and then hope that one of them works out well. Less obvious but just as important, an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve. ([Location 1092](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1092)) - Contrarian thinking doesn’t make any sense unless the world still has secrets left to give up. ([Location 1124](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1124)) - If your goal is to never make a mistake in your life, you shouldn’t look for secrets. The prospect of being lonely but right—dedicating your life to something that no one else believes in—is already hard. The prospect of being lonely and wrong can be unbearable. ([Location 1175](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1175)) - Belief in secrets is an effective truth. The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers. ([Location 1235](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1235)) - when thinking about what kind of company to build, there are two distinct questions to ask: What secrets is nature not telling you? What secrets are people not telling you? ([Location 1255](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1255)) - Unless you have perfectly conventional beliefs, it’s rarely a good idea to tell everybody everything that you know. ([Location 1284](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1284)) - A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator. ([Location 1288](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1288)) - To anticipate likely sources of misalignment in any company, it’s useful to distinguish between three concepts: • Ownership: who legally owns a company’s equity? • Possession: who actually runs the company on a day-to-day basis? • Control: who formally governs the company’s affairs? ([Location 1341](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1341)) - If a CEO doesn’t set an example by taking the lowest salary in the company, he can do the same thing by drawing the highest salary. ([Location 1397](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1397)) - Any kind of cash is more about the present than the future. ([Location 1403](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1403)) - If you get the founding moment right, you can do more than create a valuable company: you can steer its distant future toward the creation of new things instead of the stewardship of inherited success. You might even extend its founding indefinitely. ([Location 1428](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1428)) - The startup uniform encapsulates a simple but essential principle: everyone at your company should be different in the same way—a tribe of like-minded people fiercely devoted to the company’s mission. ([Location 1491](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1491)) - The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing. Every employee’s one thing was unique, and everyone knew I would evaluate him only on that one thing. ([Location 1505](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1505)) - The most fundamental reason that even businesspeople underestimate the importance of sales is the systematic effort to hide it at every level of every field in a world secretly driven by it. ([Location 1574](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1574)) - If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished. ([Location 1687](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1687)) - just as you can never expect people to buy a superior product merely on its obvious merits without any distribution strategy, you should never assume that people will admire your company without a public relations strategy. ([Location 1695](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1695)) - big data is usually dumb data. Computers can find patterns that elude humans, but they don’t know how to compare patterns from different sources or how to interpret complex behaviors. Actionable insights can only come from a human analyst (or the kind of generalized artificial intelligence that exists only in science fiction). ([Location 1829](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1829)) - Companies must strive for 10x better because merely incremental improvements often end up meaning no improvement at all for the end user. ([Location 1893](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=1893)) - Doing something different is what’s truly good for society—and it’s also what allows a business to profit by monopolizing a new market. ([Location 2016](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=2016)) - An entrepreneur can’t benefit from macro-scale insight unless his own plans begin at the micro-scale. ([Location 2070](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=2070)) - No sector will ever be so important that merely participating in it will be enough to build a great company. ([Location 2073](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=2073)) - Who makes an effective scapegoat? Like founders, scapegoats are extreme and contradictory figures. On the one hand, a scapegoat is necessarily weak; he is powerless to stop his own victimization. On the other hand, as the one who can defuse conflict by taking the blame, he is the most powerful member of the community. ([Location 2157](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=2157)) - To believe yourself invested with divine self-sufficiency is not the mark of a strong individual, but of a person who has mistaken the crowd’s worship—or jeering—for the truth. The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom. ([Location 2237](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=2237)) - But no matter how many trends can be traced, the future won’t happen on its own. What the Singularity would look like matters less than the stark choice we face today between the two most likely scenarios: nothing or something. It’s up to us. We cannot take for granted that the future will be better, and that means we need to work to create it today. ([Location 2274](https://readwise.io/to_kindle?action=open&asin=B00J6YBOFQ&location=2274))