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Book Review : Zero to One by Peter Thiel

Introduction

Zero to One is a condensed and updated version of a highly popular set of online notes taken by Masters for the CS183 class on startups taught by Thiel at Stanford University in Spring 2012 [Source: Wikipedia ] . In short, it's about creating value in the world.



Business Background of the Author


Peter Thiel was the founder of Confinity, a company making electronic payment systems which merged with Elon Musk's " X.com", a similar venture to create what we now know as Paypal, which is now a $40 billion company with one share worth $ 80. He owned a 3.7 per cent stake at Paypal. Not long after eBay ... the online retail giant, made an acquisition offer to Paypal valuing the entire company at $1 billion. After taxes and financial customs, Peter Thiel netted $55 Million, making him filthy rich. He started a hedge fund and private equity firm named Clarium funds and made an angel investment in Facebook, which made him $1.2 Billion dollars. He also founded Palantir, a data analytics firm recently valued at $20 Billion. Today he's worth $2.2 Billion.


Peter Thiel


Review

Zero to One is a comprehensive account of Peter Thiel's ideas about the business world. For a layman ... it is one of the best introductions to the start-up scene in the Valley, how monopolies run, how one can make enormous investment returns ... all in all ... it's how successful companies run in a nutshell. The book endows detailed graphs, pictographs and illustrations that can be easily collated with the context of the narrative. Barely spanning 200 pages, it covers a huge array of topics that include:-


  • Monopoly Building
  • Businesses vs Startups
  • The significance of Sales in Tech Companies
  • Accountable & responsible Recruiting
  • Eliminating competition
  • Lean Startup Dogmas
The ideas and insight the book imparts are structured around tech companies in the valley and their relevance to the topic acts as the nucleus of the argument. Here are some Ideas that I personally believe really impacted my perspective on startups ( mostly tech reated ):-


  • It is better to risk boldness than triviality.
  • A bad plan is better than no plan. 
  • Sales matter just as much as the product.
  • Every individual in the team should be responsible for just one thing.
  • The amount you spend on average to acquire a new customer (Customer Acquisition Cost, CAC).Every individual in the team should be responsible for just one thing.
And these perspectives are just the tip of the Iceberg that Thiel provides in his super engrossing account of the current startup scenario. Here are 2 comprehensive extracts from the book that will give you a good jist about the book :- 
  1. Start small and monopolize. It’s always a red flag when entrepreneurs talk about getting 1% of a $100 billion market. In practice, a large market will either lack a good starting 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 be satisfied with keeping the lights on: cutthroat competition means your profits will be zero. Once you create and dominate a niche market, then you should gradually expand into related and slightly broader markets.
  2. When Twitter went public in 2013, it was valued at $24B — 12 times higher than Times market cap. Twitter was losing money while Times earned $133M the same year. Why do startups have such big valuations? The answer is cash flow. It is different between high-growth startups and low-growth businesses. Startups would usually be profitable in the future. Startup’s main metric is growth. One big error of some entrepreneurs is that they focus only on growth while forgetting about sustainability (Zynga, Groupon). Ask yourself: would your business be around 10 years from now?
For all of us that are intrigued about the functioning of startups, this book is your brain's goldmine and one-stop shop for consumption of these Ideas. For $3 or 200 Rupees ... this book could possibly get you somewhere. Happy Reading :)

                                        


Comments

  1. Anonymous15 February 2019 at 00:23

    Great Review, please also Review similar books :)

    ReplyDelete
    Replies
    1. Rohan Bhasin15 February 2019 at 02:43

      Currently down with Exams ... will post further reviews only after 9th March ... stay tuned for research based posts till then :)

      Delete
  2. Apple Blossoms11 July 2019 at 05:03

    Wow, amazing blog layout! How long have you been blogging for? you make blogging look easy. The overall look of your website is fantastic, let alone the content!

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