Book Summary: Zero to One
The Challenge Of The Future
All Happy Companies Are Different
You Are Not A Lottery Ticket
The Mechanics Of Mafia
If You Build It, Will They Come?
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Blurb from Book: It’s easier to copy a model than to make something new. Doing what we already know how to do takes the world from 1 to n, adding more of something similar. But every time we create something new, we go from 0 to 1. The act of creation is singular, as is the moment of creation, and the result is something fresh and strange.
Unless they invest in the difficult task of creating new things, American companies will fail in the future no matter how big their profits remain today. What happens when we’ve gained everything to be had from fine-tuning the old lines of business that we’ve inherited? Today’s “best practices” lead to dead ends; the best paths are new and untried.
Technology is miraculous because it allows us to do more with less, ratcheting up our fundamental capabilities to a higher level.
The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative. Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.
My Thoughts: Exactly.
The Challenge of the Future
Blurb from Book: What important truth do very few people agree with you on?
This question sounds easy because it’s straightforward. Actually it’s very hard to answer. It’s intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon. And it’s psychologically difficult because anyone trying to answer must say something she knows to be unpopular. Brilliant thinking is rate, but courage is in even shorter supply than genius.
What does this contrarian question have to do with the future? In the most minimal sense, the future is simply the set of all moments yet to come. But what makes the future is simply the set of all moments yet to come. But what makes the future distinctive and important isn’t that it hasn’t happened yet, but rather that it will be a time when the world looks different from today. No one can predict the future exactly, but we know two things: it’s going to be different, and it must be rooted in today's world. Most answers to the contrarian question are different ways of seeing the present; good answers are as close as we can come to looking into the future.
New technology tends to come from new ventures - startups. Small groups of people bound together by a sense of mission have changed the world for the better.
Positively defined, a start up is the largest group of people you can convince of a plan to build a different future. A new company’s most important strength is new thinking: even more important than nimbleness, small size affords space to think.
My Thoughts: I left out Thiel’s Zero to One explanation. It’s very important to the message of the book and its central theme, it’s important for you to read it in context with the rest of the book.
I picked up this book on a Friday night after a day of work. Later the next day I had read the whole book. It’s so aligned with the work we do at the school and through our network, I couldn’t put it down.
Here was the explanation of why new processes and systems are so important, not regurgitating the same crap over and over. All the reasons Innovators get left out of conversations; we generally never get to the “decision” maker spots because we think differently, we don’t go to the “right” schools, and know the “right” people. We think and act differently and tend to focus on our ideas and not practicalities of managing people, funds or legal issues (which is why you need a team).
All Happy Companies Are Different
Blurb from Book: The business version of our contrarian questions is: what valuable company is nobody building?
Americans mythologize competition and credit it with saving us from socialist bread lines. Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away. The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.
How much of the world is actually monopolistic? How much is truly competitive? It’s hard to say, because our common conversation about these matters is so confused.
Monopolists lie to protect themselves. Non-monopolists tell the opposite lie: “we are in a league of our own.” The problem with a competitive business goes beyond lack of profits. A monopoly like Google is different. Since it doesn’t have to worry about competing with anyone, it has wider latitude to care about its workers, its products and it’s impact on the wider world. In business money is ether an important thing or it’s everything. Monopolists can afford to think about things other than making money; non-monopolists can’t. In perfect competition, a business is so focused on today's margins that I can’t possibly plan for a long term future. Only one thing can allow a business to transcend the daily brute struggle for survival; monopoly profits.
All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.
My Thoughts: This is an interesting perspective and I understand the concepts behind where it’s coming from but not all companies live in the commodity world, there are companies with strong customer loyalty.
What I do think companies need to focus on is capturing enough of the market to create a tipping point, each firm is different, with differing variables. Capturing enough of the market so you aren’t starving for capital which enables you to invest in innovation.
I strongly agree with Peter’s point about economists seeing individuals and businesses as interchanges atoms, not as unique creators, which is really too bad because without creation and innovation, what’s the point?
You Are Not A Lottery Ticket
Blurb from Book: The most contentious questions in business is whether success comes from luck or skill.
Is there a way to settle this debate objectively? Unfortunately not, because companies are not experiments.
In 1912, after he became the first explorer to reach the South Pole, Roald Amundsen wrote: “Victory awaits him who has everything in order - luck, people call it.” No one pretended that misfortune didn’t exist, but prior generations believed in making their own luck by hard work.
If you treat the future as something definite, it makes sense to understand it in advance and to work to shape it. But if you expect an indefinite future ruled by randomness, you’ll give up on trying to master it.
Indefinite attitudes to the future explain why most dysfunctional in our world today. Process trumps substance: when people lack concrete plans to carry out, they use formal rules to assemble a portfolio of various options.
Instead of working tirelessly to make herself indistinguishable, she strives to be great at something substantive - to be a monopoly of one. You can also expect the future to be either better or worse than the present. Optimists welcome the future; pessimists fear it. Combining these possibilities yields four views:
Indefinite Pessimism: works because it’s self-fulfilling; if you are a slacker with low expectations, they’ll probably be met.
Definite Pessimism: works by building what can be copied without expecting anything new.
Indefinite Optimistic: seem inherently unsustainable: how can the future get better if no one plans for it?
Definite Optimistic: works when you build the future you envision.
My Thoughts: This section was the best. Not only did he slice and dice through a bunch of preconceived notions I had, he did an excellent job at taking a very complex concept and breaking it down so simply I started discussing it with my kids.
Strange to find myself in the worst category, as an indefinite optimist, spreading myself across too many categories to gain mastery at any one, which is also completely the opposite of what I teach our trainees, oddly enough.
Blurb from Book:. Every one of today’s most famous and familiar ideas was once unknown and unsuspected. Remember the contrarian question: what important truth do very few people agree with you on?
If we already understand as much of the natural work as we ever will - if all of today’s conventional ideas are already enlightened, and if everything has already been done - then there are no good answers. Contrarian thinking doesn’t make any sense unless the world still has secrets left to give up.
Of course, there are many things we don’t yet understand, but some of those things may be impossible to figure out - mysteries rather than secrets.
Recall the business version of our contrarian question: what valuable company is nobody building? Every correct answer is necessarily a secret: something important and unknown, something hard to do but doable. If there are many secrets left in the world, there are probably many world-changing companies yet to be started.
Most people act as if there were no secrets left to find...four social trends have conspired to root out belief in secrets:
Incrementalism: in exchange for doing exactly what’s asked of you (and for doing it just a bit better than your peers), you’ll get an A. This process extends all the way through the tenure track, which is why academics usually chase large numbers of trivial publications instead of new frontiers.
Risk Aversion: People are scared of secrets because they are afraid of being wrong, The prospect of being lonely but right - dedicating your life to something that no one else believes in - is really hard.
Complacency: Social elites have the most freedom and ability to explore new thinking, but they seem to believe in secrets the least.
Flatness: as globalization advances, people perceive the world as one homogeneous, highly competitive marketplace: the word is “flat.” Given that assumption, anyone who might have had the ambition to look for a secret will first ask himself: if it were possible to discover something new, wouldn't someone from the faceless global talent pool of smarter and more creative people have found it already?
The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers. There is more to do in science, medicine, engineering and in technology of all kinds.
We can find new ways to generate energy that free the world from conflict over fossil fuel. We can invent faster and faster ways to travel from place to place over the surface of the planet; we can even learn how to escape it entirely and settle new frontiers. But we will never learn any of these secrets unless we demand to know them and force ourselves to look.
My Thoughts: This comes down to forcing yourself to believe in something you can’t see. To be brave enough to believe in your own vision, even if everything and everyone is telling you “No”. To be disciplined enough to keep going even when you want to give up. Trust you are smart enough to figure it out along the way. You will if you stay honest, with clear eyes looking towards YOUR future, defined world, not someone else's. This chapter appealed to me because it combines seemingly contradictory traits: Discipline and Free Thinking. Facts and the Unknown.
Mechanics of Mafia
Blurb from Book: “Company culture” doesn’t exist apart from the company itself: no company has a culture: every company is a culture. Recruiting is a core competency for any company. It should never be outsourced. You need people who are not just skilled on paper but who will work together cohesively after they’re hired.
Just cover the basics like health insurance and then promise what no other can: the opportunity to do irreplaceable work on a unique problem alongside great people.
Everyone at your company should be different in the same way - a tribe of like minded people fiercely devoted to the company’s mission.
For a company to work, it didn’t matter what people looked like or which country they came from , but we needed every new hire to be equally obsessed.
My Thoughts: Yes again. People are not disposable and when a group of likely minded, driven and focused individuals get together, things move; energy drives the change and evolution of the organization. Without that, it’s just showing up to get a paycheck, why would you do that?
If You Build It, Will They Come?
Blurb from Book: Most businesses get zero distribution channels to work: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.
Nerds might wish that distribution could be ignored and salesmen banished to another planet. All of us want to believe that we make up our own minds, that sales doesn’t work on us. But it’s not true. Everybody has a product to sell - no matter whether you’re an employee, a founder, or an investor. It’s true even if your company consists of just you and your computer. Look around. If you don’t see any salespeople, you're the salesperson.
Good enterprise sales strategies start small, as it must: a new customer might agree to become your biggest customer, but they’ll rarely be comfortable signing a deal completely out of scale with what you’ve sold before.
The challenge here isn’t about how to make any particular sale, but how to establish a process by which a sales team of modest size moves the product to a wide audience.
There’s a wide range of sales ability; there are many graduations between novices, experts and masters. There are even sales grandmasters. If you don’t know any grandmasters it’s not because you haven’t encountered them, but rather because their art is hidden in plain sight.
My Thoughts: I love sales. Sales to me includes design and education; my two favorite subjects. The idea of sales being manipulation is old, short sighted and narrow minded.
Real sales is about educating people about your new way of thinking, being and acting. Showing them how your widget, concept, though will help them achieve what they already want. Teaching them that by working together we can get there faster and we all win.
We are not an immovable object, but if you keep your head on straight, both eyes forward and stay honest with yourself you’ll get where you need to go.
From the book: If even the most farsighted founders cannot plan beyond the next 20 to 30 years, is there anything to say about the very distant future? We don’t know anything specific, but we can make out the broad contours. Philosopher Nick Bostrom describes four possible patterns for the future of humanity:
Recurrent Collapse: The ancients saw all of history as a never ending alteration between prosperity and ruin. Only recently have people dared to hope that we might permanently escape misfortune.
Plateau: In this scenario, the future will look a lot like the present.
Extinction: A collapse so devastating that we won’t survive it.
Takeoff: The last of the four possibilities is the hardest one to imagine: accelerating takeoff towards a much better future.
Which of the four will it be?
Our task today is to find singular ways to create the new things that will make the future not just different, but better - to go from 0 to 1. The essential first step is to think for yourself. Only by seeing our world anew, as fresh and strange as it was to the ancients who saw it first, can we both recreate it and preserve it for the future.
My Thoughts: I cannot overstate how much I appreciate this book. Peter has taken a few hundred pages and articulated what my brain has been unable to express.
One of the reasons I’ve started CMC and Loop was to create a place where people started challenging preconceived notions of how the world works. Becoming self -directed is the first step towards engaging with the world, in order to change the world people must believe they can make an impact, they have the ability to change themselves (first), then change their environment that both affect their outcomes. This influence is how you move from an indefinite future to a definite one, you must first believe you have the ability to change outcomes.
Start by thinking for yourself, and doing the work to become self aware.
About the Author of “Zero to One”
Peter co-founded PayPal and Palantir, made the first outside investment in Facebook, funded companies like SpaceX and LinkedIn, and started the Thiel Fellowship, which encourages young people to put learning before college.
About the Author of This Summary
Vivian is the Governance Chair of CMC Workforce and “Chief Realist” at Loop Consulting Group. She lives in NYC. Connect here.