Thiel’s Seven Questions

Everyone in the business world knows and respects billionaire Peter Thiel, founder of PayPal, and the Thiel Fellowship and notorious leader of the PayPal Mafia, the group known for founding companies like PayPal, YouTube, LinkedIn, Tesla, and SpaceX, among others. In Thiel’s book, “Zero to One” he gives “notes on startups, or how to build the future.” In this book, my biggest takeaway was Thiel’s seven questions he says every business must answer in order to succeed. You don’t need to necessarily be able to answer all seven, but if you can only answer one or two, you should probably not go into business. The seven questions focus on how you will be different from your competition, or have none at all.

1.) The Engineering Question

You need to be able to provide a really new and innovative technology rather than just being the 2.0 of Apple or Dell. You need to be able to provide an entirely new technology that will really impress a customer base and innovate the way they live a part of their life, whether it be professionally or personally.

2.) The Timing Question

I this the right timing for you to be launching your company? Does anyone remember Microsoft’s tablet in 2002? Yeah, me neither. You need to be early enough to capture the market (next point) but late enough that you don’t sit on it for years waiting for the rest of society to catch up.

3.) The Monopoly Question

You want to be able to capture the entire market, if possible, or at least a really large portion of it. This is why it’s called the Monopoly question: you want a monopoly. Your goal as a businessperson is obviously to make as much money as possible. If you’re a large player in a market, then that is a much easier thing to accomplish.

4.) The People Question

You need the right team. You need a group of people that work really well together and also have the variety of skills to run your company. The People question spans not only to people but to things like culture as well. If you have the right people and the right culture, your company will be a force to be reckoned with.

5.) The Distribution Question

You can have a great product and a great source of funding, but if your customer doesn’t feel inclined to buy your product, then your company will die. Distribution in this sense comes from the minute your product leaves the factory to the customer buying the product, or if the product is bought online then the time it is dropped to his door, or if it’s online software then the moment it is downloaded. You get the point. Mold your delivery from start to finish.

6.) The Durability Question

Will you be able to defend your position in the market long-term? How about in 20 years? You have to plan ahead to be able to defend your position down the road. What can you do that no one else can, even after the patents expire?

7.) The Secret Question

What do you see that others don’t? If anyone else saw the opportunity, they’d take it as well. What opportunity have you found that others haven’t?

If you can answer these questions, then chances are you will be able to start a successful company. If not, you should probably re-evaluate your idea or business model.