Zero to One_ Notes on Startups, or How to Build the Future ( PDFDrive )

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Apple devices because that’s where hundreds of millions of users are, and thoseusers stay on the platform because it’s where the apps are. These othermonopolistic advantages are less obvious than Apple’s sparkling brand, but theyare the fundamentals that let the branding effectively reinforce Apple’smonopoly.Beginning with brand rather than substance is dangerous. Ever since MarissaMayer became CEO of Yahoo! in mid-2012, she has worked to revive the oncepopularinternet giant by making it cool again. In a single tweet, Yahoo!summarized Mayer’s plan as a chain reaction of “people then products thentraffic then revenue.” The people are supposed to come for the coolness: Yahoo!demonstrated design awareness by overhauling its logo, it asserted youthfulrelevance by acquiring hot startups like Tumblr, and it has gained mediaattention for Mayer’s own star power. But the big question is what productsYahoo! will actually create. When Steve Jobs returned to Apple, he didn’t justmake Apple a cool place to work; he slashed product lines to focus on thehandful of opportunities for 10x improvements. No technology company can bebuilt on branding alone.
BUILDING A MONOPOLYBrand, scale, network effects, and technology in some combination define amonopoly; but to get them to work, you need to choose your market carefullyand expand deliberately.Start Small and MonopolizeEvery startup is small at the start. Every monopoly dominates a large share of itsmarket. Therefore, every startup should start with a very small market. Alwayserr on the side of starting too small. The reason is simple: it’s easier to dominatea small market than a large one. If you think your initial market might be too big,it almost certainly is.Small doesn’t mean nonexistent. We made this mistake early on at PayPal.Our first product let people beam money to each other via PalmPilots. It wasinteresting technology and no one else was doing it. However, the world’smillions of PalmPilot users weren’t concentrated in a particular place, they hadlittle in common, and they used their devices only episodically. Nobody neededour product, so we had no customers.With that lesson learned, we set our sights on eBay auctions, where we foundour first success. In late 1999, eBay had a few thousand high-volume“PowerSellers,” and after only three months of dedicated effort, we were serving25% of them. It was much easier to reach a few thousand people who reallyneeded our product than to try to compete for the attention of millions ofscattered individuals.The perfect target market for a startup is a small group of particular peopleconcentrated together and served by few or no competitors. Any big market is abad choice, and a big market already served by competing companies is evenworse. This is why it’s always a red flag when entrepreneurs talk about getting1% of a $100 billion market. In practice, a large market will either lack a goodstarting point or it will be open to competition, so it’s hard to ever reach that 1%.And even if you do succeed in gaining a small foothold, you’ll have to besatisfied with keeping the lights on: cutthroat competition means your profitswill be zero.
Page 3 and 4: Copyright © 2014 by Peter ThielAll
Page 5 and 6: PrefaceZERO TO ONEEVERY MOMENT IN B
Page 7 and 8: THE CHALLENGE OF THE FUTUREWHENEVER
Page 9 and 10: century air conditioning, and even
Page 11 and 12: STARTUP THINKINGNew technology tend
Page 13 and 14: A QUICK HISTORY OF THE ’90SThe 19
Page 15 and 16: MANIA: SEPTEMBER 1998-MARCH 2000Dot
Page 17 and 18: hurry. A South Korean firm wired us
Page 19 and 20: The entrepreneurs who stuck with Si
Page 21 and 22: dogmatically rejecting them. Instea
Page 23 and 24: In this book, we’re not intereste
Page 25 and 26: Think about how Google talks about
Page 27 and 28: between Hackers and Jaws: rap star
Page 29 and 30: RUTHLESS PEOPLEThe problem with a c
Page 31 and 32: monopoly profits provides a powerfu
Page 33 and 34: competed even harder for the standa
Page 35 and 36: Office vs. Docs, and Surface vs. Ne
Page 37 and 38: If you can’t beat a rival, it may
Page 39 and 40: In March 2001, PayPal had yet to ma
Page 41 and 42: CHARACTERISTICS OF MONOPOLYWhat doe
Page 43: 3. Economies of ScaleA monopoly bus
Page 47 and 48: Silicon Valley has become obsessed
Page 49 and 50: YOU ARE NOT A LOTTERY TICKETTHE MOS
Page 51 and 52: CAN YOU CONTROL YOUR FUTURE?You can
Page 53 and 54: merry in the meantime: hence Europe
Page 55 and 56: hubris. You can still visit the Bay
Page 57 and 58: businessman, but actually his own a
Page 59 and 60: opinion exactly, so for the most pa
Page 61 and 62: Francis Bacon wrote that “the pro
Page 63 and 64: American households were saving, at
Page 65 and 66: THE RETURN OF DESIGNWhat would it m
Page 67 and 68: YOU ARE NOT A LOTTERY TICKETWe have
Page 69 and 70: to understand: we don’t live in a
Page 71 and 72: The error lies in expecting that ve
Page 73 and 74: of companies that will successfully
Page 75 and 76: After 10 years, however, the portfo
Page 77 and 78: WHAT TO DO WITH THE POWER LAWThe po
Page 79 and 80: SECRETSEVERY ONE OF TODAY’S most
Page 81 and 82: WHY AREN’T PEOPLE LOOKING FOR SEC
Page 83 and 84: are found mostly in history books a
Page 85 and 86: THE WORLD ACCORDING TO CONVENTIONHo
Page 87 and 88: THE CASE FOR SECRETSYou can’t fin
Page 89 and 90: HOW TO FIND SECRETSThere are two ki
Page 91 and 92: WHAT TO DO WITH SECRETSIf you find
Page 93 and 94: FOUNDING MATRIMONYWhen you start so
Page 95 and 96:
To see misalignment at its most ext
Page 97 and 98:
ON THE BUS OR OFF THE BUSAs a gener
Page 99 and 100:
VESTED INTERESTSStartups don’t ne
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10
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BEYOND PROFESSIONALISMThe first tea
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compensation or perks, but you can
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DO ONE THINGOn the inside, every in
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11
Page 111 and 112:
NERDS VS. SALESMENThe U.S. advertis
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himself). The polar opposite busine
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The traditional U.S. aerospace indu
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mass appeal but lack any method of
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One of these methods is likely to b
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12
Page 123 and 124:
SUBSTITUTION VS. COMPLEMENTARITYFif
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people. We don’t trade with compu
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computer hybrid approach from PayPa
Page 129:
generalized artificial intelligence
Page 132 and 133:
SEEING GREENAT THE START of the 21s
Page 134 and 135:
5. The Distribution QuestionDo you
Page 136 and 137:
THE TIMING QUESTIONCleantech entrep
Page 138 and 139:
THE MONOPOLY QUESTIONIn 2006, billi
Page 140 and 141:
Cleantech entrepreneurs’ thinking
Page 142 and 143:
THE DISTRIBUTION QUESTIONCleantech
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gas, and gas prices had fallen more
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THE MYTH OF SOCIAL ENTREPRENEURSHIP
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broader markets in the future.TEAM.
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world needs energy, only a firm tha
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THE FOUNDER’S PARADOXOF THE SIX P
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THE DIFFERENCE ENGINESome people ar
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Where does this strange and extreme
Page 158 and 159:
Another example is Sean Parker, who
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WHERE KINGS COME FROMExtreme founde
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For some fallen stars, death brings
Page 164 and 165:
distinctive persona? Or, in his inc
Page 166 and 167:
the impeccably credentialed executi
Page 168 and 169:
future will look a lot like the pre
Page 170 and 171:
Singularity, an attempt to name the
Page 172 and 173:
Illustration CreditsThe illustratio
Page 174 and 175:
Boyle, RobertbrandingBranson, Richa
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Earnhardt, Dale, Jr.East Asian fina
Page 178 and 179:
housing bubble, 2.1, 8.1Howery, Ken
Page 180 and 181:
dynamism of newlies ofprofits ofpro
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Q-CellsRand, AynRawls, John, 6.1, 6
Page 184 and 185:
globalization andproprietarytechnol
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About the AuthorsPeter Thiel is an
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Zero to One_ Notes on Startups, or How to Build the Future ( PDFDrive )

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