Zero to One

a Book Review of the listicle by Peter Thiel and Blake Masters

I feel like talking about Peter Thiel is like talking about Elon Musk — it’s risky.  Thiel is a polarizing figure, just look at the first five headlines from a recent google news search :

Although very few people read this book blog (thank you for reading!), I’m going to avoid talking about Peter Thiel, an obvious trap, and focus on his book Zero to One.

Zero to One: Notes on Startups, or How to Build the Future started as a collection of notes taken by Blake Masters taken during a class Peter Thiel gave at Stanford. The notes were compiled, edited, and refined in Zero to One, one of Silicon Valley’s bibles.  The book is divided into sections that are each 1-5 pages long that talk about different concepts and frameworks concerning start-ups, founders, and ideation.

I think this book has good advice:

“… a startup messed up at its foundation cannot be fixed”

“A board of three is ideal. Your board should never exceed five people, unless your company is publicly held.”

“The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.”

And some questionable and close-minded advice:

“So we instituted a blanket rule: pass on any company whose founders dressed up for pitch meetings.”

Zero to One is again another business book that is filled with mostly reasonable opinions with a couple of unreasonable opinions sprinkled in. Overall, the book is filled with very interesting insights about finding and creating successful start-ups. For example:

“First, only invest in companies that have the potential to return the value of the entire fund. (Even quite successful companies usually succeed on a more humble scale.) This leads to rule number two: because rule number one is so restrictive, there can’t be any other rules.”

Thiel points out that investing in start-ups like they are mutual funds, whereby you add companies to your profile that do a little of this and a little of that, is not a reasonable approach for a VC. If VCs wanted to make the same amount of money as a mutual fund, they would just buy stocks. Instead, VCs are taking riskier bets with the goal of making a shit-ton of money.  Thiel’s rule above implies that the best bets are companies that 1) have a humongous market and 2) have no competition.

I found Thiel’s discussions comparing companies that have competition and companies that own the whole market fascinating. He points out that monopolies play down their successes: “Framing itself as just another tech company allows Google to escape all sorts of unwanted attention.” Whereas, “Non-monopolists tell the opposite lie: ‘we’re in a league of our own’.” Using Thiel’s analysis, it is very easy to spot companies that are thriving and companies that are fighting to stay alive in the face of competition (eg. Facebook and Netflix).

It’s really impossible to summarize every idea in this book because it is itself a summary of Peter Thiel’s opinions. It is a very readable book even thought it has no internal narrative and is pretty much a long listicle. Thiel is an undeniably successful entrepreneur and Zero to One has some undeniably valuable tidbits.

The Don’t Call Me Ishmael Official Book Rating, Sponsored by Whales’ Non-Binary Association (WNBA):

3.5/5 Whales. Enjoyable.