Zero to One

4 minute read

Intro

I think when I originally read this book in 2014 I was excited to have something from a PayPal founder and Facebook investor. All I had read up to that time was maybe the The $100 Startup and, of course, The Lean Startup. Actually, I had already heard half of the lessons from my startup friends in San Francisco before I even opened the book.

If you are new here, read why I put my semi-personal book notes online.

Summary

Peter feels that only those with the ability to flee established conventions can come up with new ideas capable of achieving horizontal progress. Horizontal progress is the ability to go from “0 to 1” while vertical progress is the ability to go from “1 to n”. The question Peter asks when recruiting is, “What popular belief do you disagree with? Why?” to identify those who can challenge the assumptions of a given system; something critical to going from 0 to 1. Brian Chesky from AirBnB has an amazing exercise called “the 11-star experience” that can help with assumption challenging.

Master Your Destiny

Be active in building your future. You aren’t a passenger but the driver that is ultimately making decisions. Peter recommends being focused in a subject/domain instead of understanding a broad range of topics. The idea that this way you can be the best at one thing. More reading about what it means to focus and the outcomes I recommend checking out Outliers: The Story of Success by Malcolm Gladwell as well as discussion pieces on why the 10,000-hour rule mentioned in the book is incorrect.

Monopolies are Good

For both society and innovators. Peter mentions that competition is necessary from an economic and social perspective. From an economic perspective, he mentions how Google was nothing more than a monopoly on search engines that provide positive economic value. From a societal perspective, they encourage companies to usurp the current monopoly. I’m not sure if there are edge cases that Peter might think a monopoly fails to encourage innovation. This is likely a contentious subject you’ll want to look further into. At any rate, most would agree a monopoly is good for a company from a purely economic standpoint.

Invest in Secrets

Peter feels the world still has many secrets to uncover. Much of what is preventing the “discovery” of these secrets is our assumptive nature that wants to keep our head down and follow the heard. A startup needs to uncover these secrets, probably using technology, and innovate from 0 to 1 to create a defensible position in the market.

Prepare to Invest Years

It may take years to become profitable, this isn’t necessarily a bad thing. Peter’s company, Paypal, is a prime example of this not expecting substantial profits until about 10 years later. A startup needs to start small and expand with a focused effort only after finding a secret advantage over its competitors. Amazon used this strategy by first focusing on selling books and only then expanding to CD’s, DVD’s and eventually to e-commerce in general.

People and Culture

The most important part of an early-stage startup is the people. Not only the technical knowledge but the relationship between the founders and early employees. Peter looks at how strong of a relationship the early team has. From my personal experience, having founders who will stick around when times get tough is essential. Partners/Investors are part of this early team. Making sure there is balance even in the face of competing incentives are important. Money is not the only thing an investor is bringing. Keep in mind their cultural contribution.

Selling is Crucial

Product and engineering tend to focus on the technicals of what is being built. It’s important to think from the beginning how to create a sales team and what the distribution channels of a product would be. I have used the business model canvas in the past for this as a great starting point. This is especially the case with an innovative 0 to 1 product where the market doesn’t explicitly exist to consume the product. One part of your startup may be to create that market.

Role of the Founder

Peter feels that founders are not ordinary people nor easy to deal with. They tend to be eccentric with strong opinions and visions. Business founders have a lot of responsibility when it comes to creating a culture and vision of a startup and that can be more important than any management practices. I think this idea is probably the second most contentious. I’ve certainly experienced a range of CEO archetypes. Is there a consensus bias here from Peter given his personality? I think it’s possible, but that doesn’t mean it’s incorrect.

Outro

Of course, this is the book on every co-founder’s bookshelf, mine included. (Well, virtual bookshelf). It seems wrong not to include it as part of startup “cannon” so definitely worth checking out if for no other reason than as a water-cooler topic.

Avishaan’s Goodreads

Crucial Conversations: Tools for Talking When Stakes Are High
The Hidden Brain: How Our Unconscious Minds Elect Presidents, Control Markets, Wage Wars, and Save Our Lives
Hello Startup. A Programmer's Guide to Building Products, Technologies, and Teams
How to Win Friends and Influence People
Drive: The Surprising Truth About What Motivates Us
The Systems Mindset: Managing the Machinery of Your Life
Smarter Faster Better: The Secrets of Being Productive in Life and Business
The Five Dysfunctions of a Team: A Leadership Fable
The Pragmatic Programmer: From Journeyman to Master


Avishaan's favorite books »