The Founder’s Paradox from Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel.

Here are the highlights I made while reading Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel.

• The act of creation is singular, as is the moment of creation, and the result is something fresh and strange.
• Today’s “best practices” lead to dead ends; the best paths are new and untried.
• Technology is miraculous because it allows us to do more with less, ratcheting up our fundamental capabilities to a higher level.
• The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative.
• The single most powerful pattern I have noticed is that successful people find value in unexpected places.
• If you take one typewriter and build 100, you have made horizontal progress. If you have a typewriter and build a word processor, you have made vertical progress.
• Properly understood, any new and better way of doing things is technology.
• The most contrarian thing of all is not to oppose the crowd but to think for yourself.
• The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.
• 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.
• Winning is better than losing, but everybody loses when the war isn’t one worth fighting.
• For a company to be valuable it must grow and endure, but many entrepreneurs focus only on short-term growth. They have an excuse: growth is easy to measure, but durability isn’t.
• If you focus on near-term growth above all else, you miss the most important question you should be asking: will this business still be around a decade from now?
• Software startups can enjoy especially dramatic economies of scale because the marginal cost of producing another copy of the product is close to zero.
• Optimists welcome the future; pessimists fear it.
• Monopoly businesses capture more value than millions of undifferentiated competitors.
• If you do start your own company, you must remember the power law to operate it well. The most important things are singular: One market will probably be better than all others. One distribution strategy usually dominates all others.
• Unless you have perfectly conventional beliefs, it’s rarely a good idea to tell everybody everything you know.
• Big corporations are prone to misalignment, especially between ownership and possession. The CEO of a huge company like General Motors will own some of the company’s stock, but only a trivial portion of the total. Therefore he’s incentivized to reward himself through the power of possession rather than the value of ownership.
• Unlike corporate giants, early-stage startups are small enough that founders usually have both ownership and possession.
• Since time is your most valuable asset, it’s odd to spend it working with people who don’t envision any long-term future together.
• In Silicon Valley, nerds are skeptical of advertising, marketing and sales because they seem superficial and irrational. But advertising matters because it works.
• Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true.
• Most businesses get zero distribution channels to work: poor sales rather than bad product is the most common cause of failure.
• The convergence of desire is even more obvious at the top: all oligarchs have the same taste in Cristal, from Petersburg to Pyongyang.
• The stark differences between man and machine mean that gains from working with computers are much higher than gains from trade with other people. We don’t trade with computers any more than we trade with livestock or lamps. And that’s the point: computers are tools, not rivals.
• When we design new computer technology to help solve problems, we get all the efficiency gains of a hyper specialized trading partner without having to compete with it for resources.
• Big data is usually dumb data.
• For computer scientists, that means reducing human capabilities into specialized tasks that computers can be trained to conquer one by one.
• Only when your product is 10x better can you offer the customer transparent superiority.
• Huge, trillion-dollar markets mean ruthless, bloody competition.
• The best sales is hidden.
• Great companies have secrets: specific reasons from success that other people don’t see.
• Doing something different is what’s truly good for society.
• The best projects are likely to be overlooked, not trumpeted by a crowd: the best problems to work on are often the ones that nobody else even tries to solve.
• A valuable business must start by finding a niche and dominating a small market.
• Steve Job’s return to Apple shows how the most important task in business — the creation of new value — cannot be reduced to a formula and applied by professionals.
• A unique founder can make authoritative decisions, inspire strong personal loyalty, and plan ahead for decades.
• Paradoxically, impersonal bureaucracies staffed by trained professionals can last longer than any lifetime, but they usually act with short term horizons.

I’m currently reading This Time Is Different. I will email you my highlights as soon as they are ready.

If you learn from these writing please tell a friend. I would appreciate that.

Thanks for reading and listening.