How to build a startup

This time I will discuss the book “Zero to one” by Peter Thiel. He’s probably best known as one of the founders of Pay Pal, but he’s also an investor in Facebook and many other big companies. What does the term zero to one mean. Basically it’s talking about innovation to go from one to n. To create something new. You’re going from nothing to something. The best example is globalization. You’re not creating something new. You’re simply taking the same thing and moving it around. Technology went from zero to one. There is this compelling argument that technology and technological change is what will change the future as it has dramatically changed human history starting about two hundred years ago and it is true. We need technological breakthroughs. Apart from communications and computers we haven’t really seen big changes. If you look around, things are not so different.  That’s what zero to one is talking about. The book itself is not meant to be a playbook for how to create a company. It’s more inspiration and a set of patterns that Thiel has seen in companies and strategies that he thinks are zero to one strategies.

Perhaps because of his legal training (or maybe he went into law because of his personality trait) Thiel is a bit of a contrarian argumentative. He brings up four points that most modern business strategists talk about.

Point number 1: Make incremental advances.

Point number 2: Stay lean and flexible.

Point number 3: Improve on the competition.

Point number 4: Focus on the product, not the sales.

After experiencing the dot com bubble, these are what he believes makes a powerful lasting company. These four points are at the core of the book, because Thiel strongly believes that massive technological change is needed to save the planet. Being neat and incremental is just not going to cut it. A different way to sell shoes online is not really an advancement.

If you’re providing a homogeneous solution then by definition you’re not going to change the world.  And there’s one really solid piece of advice here: the lesson for entrepreneurs is clear if you want to create and capture lasting value don’t build an undifferentiated commodity business. The finance industry is the only way to create money, if you don’t know how to create wealth, but Thiel argues against globalization. Adopt the adaptation of western consumerism and western energy consumption lifestyle. Globalization is mere substitution. You take this job here and you move it over there and you pay the person last. It’s kind of like a reshuffling of the deck, really it’s moving pieces around the table. Through technology though we can create a complementary structure. We can have an advancement, not a substitution. What people can do in tandem with technology is much greater.

Thiel is about creating a better future. Maybe not necessarily creating some passion business. It’s not an operational book, but Thiel says that arguing over process has become a way to endlessly making concrete plans for a better future. So process has its place, but vision comes before process. Ask yourself this: What valuable company is nobody building today.

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