Peter Thiel’s Zero to One is an insightful read asking the right questions, not only a startup but every business should answer. If you are looking to build a startup what are some of the key things you need? Let’s see what they are and how Peter Thiel can help us. Here are some valuable takeaways from his book.
Business Ideas
Where do we find business ideas? Answering this question Peter Thiel says business ideas or secrets as he likes to call them are everywhere waiting to be discovered but will only reveal themselves to “relentless searchers”. Two potential sources for your ideas can either be people or nature so when looking for ideas ask “What secrets is nature not telling you? What secrets are people not telling you?” Airbnb, Uber and Lyft were all opportunities hiding in plain sight waiting to be discovered. Have you spotted any such open hidden opportunities?
Vetting your business idea
Assuming that you have found your prized business idea, how do you vet your idea? The time test — 10 - 15 years from now, will there be users for my product and would they be willing to pay for it? He urges us to look beyond the discounted cash flow and examine the qualitative factors to judge whether the startup is going to survive the future. Let’s see what are some of the qualitative factors that may impact the business model of say Lyft or Uber in future — driverless cars, regulations etc.
Building a market for your idea
You now have a business idea that will stand the test of time, next how to find the users? Start small, find a niche, dominate and expand. Pick a small segment of the market focus on building what they love, dominate that market and move on to related markets. Citing Amazon and eBay as examples that were not looking to be embraced by the whole world, he says Amazon deliberately started out it’s journey with selling books before it grew and moved on to extended markets. Similarly eBay catered to hobbyists like the Beany Baby collectors before becoming the online trading platform of choice for millions of users. A small market will also give you scope to innovate and move faster.
