Book Review: Zero to One
4 min readJun 23, 2019
- Monopolists are only rent collectors but Creative monopolists are good for society (I'm don't sure).
- Winning the so called ultimate competition in life might be a false victory. Take for example all the games we set up with school getting competitive, grades being competitive then college getting for signaling. Peter shares his personal story here, which I completely relate to. All Rhodes scholars had a great future in their past.
- Competition is like war not business. Winning is better than losing but everyone loses when the war isn't worth fighting for.
- The value of a business today is the sun of all the money or cash flows it will generate in the future
- Traits shared among businesses with large cash flows in the future: proprietary technology, network effects, economies of scale and branding
- Sequencing markets correctly is underrated and it takes discipline to expand gradually
- 2 dimensions: optimism or pessimism and definite versus indefinite. This is for planning your future rather than depending on things working out for you
- In philosophy, politics and business arguing over process has becomea way to endlessly defer making concrete plans for a better future
- Darwinism doesn't work in designing startups for success. Darwin believed that even by making no plans the best things get selected automatically. But iteration without a bold plan won't take you from 0 to 1 in a business. Making small changes to a small thing takes you to a local maximum rather than a global maximum
- A good business with a good definite plan will always be underrated in a world where people see the future as random
- Why we no longer believe in secrets:
- Incrementalism (told to follow a fixed park, just bit by bit better)
- Risk aversion (being lonely and being wrong are very scary things)
- Complacency (why risk if you can take advantage of the present)
- Flatness or believing if something was work finding, someone must've already found it on Earth
- The choice of doubt can dissuade people from even starting to look for secrets in a world that seems too big a place for any one individual
- You can't find secrets without looking for them
- Secrets are quite often hidden in plain sight.
- Two kinds of secrets: secrets of nature and of people
- Competition and capitalism are opposites
- Every great business is built around a severe that nobody knows
- You cannot create a great company on a flawed foundation: finding the right cofounders and the right first people to hire can make our break the company
- If there founders develop irreconcilable differences, the company becomes the victim
- If men were angels, no government would be necessary but men aren't. Or in other words, anarchic companies are bound to fail
- You need good people who get along but you also need a structure to keep them aligned
- Part time employees don't work, even working remotely should be avoided
- A cash poor executive will be incentivised to increase the value of the company as a whole
- Anyone who prefers equity compared to can shows commitment for the longer term
- In an ideal company culture, people should forget what formal business hours look like. No company has a culture, every company is a culture. A startup is a team of people on a mission
- You'll attract the employees you need of you can explain why your mission is compelling: not why it's important in general but why you're doing what no one else is going to get done
- Job assignments for employees in a company isn't just about the relationship between the worker and the task, it's also the relationships between employees
- Defining roles reduces conflict, setting up people for success means assigning them to do just one thing so that they can be evaluated fairly on just that
- Eliminating competition makes it easier for everyone to build long term relationships
- Internal conflict inside a company is like an auto-immune disease
- It takes a lot of work to make sales look easy. Like acting sales works best when hidden
- Superior sales and distribution itself can create monopolies even with no product differentiation. The converse is not true.
- Total net profit that you can earn from a customer from the relationship with them or customer lifetime value (clv) > the amount spent to acquire a new customer (cac)
- Complex sales works best when you don't have salesmen at all, instead the CEO themselves spends time on the road convincing people for the buy decision
- Businesses when complex sales models work if they achieve 50% to 100% growth year over year over the course of a decade. Revenue doesn't suddenly increase 10x, which might seem disappointing but customers don't just switch to a product because it's obviously superior.
- Once you have a pool of reference customers who are successfully using your product, then you can go for ever bigger deals. A new customer might agree to become your biggest customer but they'll rarely be comfortable signing a deal which is completely out of sync with what you've sold before
- Whoever is the first to dominate the most important segment of a market with viral potential will be the last mover in the whole market.
- Poor sales rather than bad product is the most common cause of failure. If you can get just one distribution channel to work you have a great business. If you try for several but don’t nail one, you’re finished.
