By Peter Thiel with Blake Masters
Doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1
The best paths are new and untried
Technology is miraculous because it allows us to do more with less
By creating new technologies, we rewrite the plan of the world
Successful people find value in unexpected places
Think about business from first principles
What important truth do very few people agree with you on?
Brilliant thinking is rare, but courage is in even shorter supply than genius
Any new and better way of doing things is technology
It’s hard to develop new things in big organizations, and it’s even harder to do it by yourself
Principles:
- It is better to risk boldness than triviality
- A bad plan is better than no plan
- Competitive markets destroy profits
- Sales matters just as much as product
The most contrarian thing of all is to think for yourself
What valuable company is nobody building?
Airlines compete with each other, but Google stands alone
If too many firms enter the market, they’ll suffer losses, some will fold, and prices will rise back to sustainable levels.
The kind of company that’s so good at what it does that no other firm can offer a close substitute
If you want to create and capture lasting value, don’t build an undifferentiated commodity business
Monopolies can keep innovating because profits enable them to make the long-term plans and to finance the ambitious research projects that firms locked in competition can’t dream of
Monopoly is the condition of every successful business
Creative monopoly means new products that benefit everybody and sustainable profits for the creator
The more we compete, the less we gain
If you’re interested in making things you’ll be less afraid to pursue that single-mindedly and become incredibly good at them
The value of a business today is the sum of all the money it will make in the future
It takes time to build valuable things, and that means delayed revenue
Every monopoly is unique, but they usually have a combination of proprietary technology, network effects, economies of scale, and branding
Proprietary technology must be at least 10 times better than its closest substitute
Network effects make a product more useful as more people use it
The initial markets are so small that they often don’t even appear to be business opportunities
A good company should have the potential for great scale built into its first design
Every startup should start with a very small market, a few thousand people who really needed our product
A small group of people of particular people concentrated together and served by few or no competitors
Once you create and dominate a niche market, the you should gradually expand into related and broader markets
Don’t disrupt. Avoid competition as much as possible
You must study the endgame before everything else
Treat the future as something definite. Understand it in advance and work to shape it
Successful people have an easier time doing new things, whether due to their networks, wealth, or experience
Shallow men believe in luck, in circumstances. Strong men believe in cause and effect
Strive to be great at something substantive, to be a monopoly of one
Optimists welcome the future
Only in a definite future is money a means to an end, not the end itself
Definite plans solve specific problems
You can change the world through careful planning
Reject the unjust tyranny of chance. You are not a lottery ticket
Never underestimate exponential growth
After 10 years the portfolio won’t be divided between winners and losers, it will be split between one dominant investment and everything else
Focus relentlessly on something you’re good at doing.Before that you must think hard about whether it will be valuable in the future
In order to be happy, every individual needs goals whose attainment requires effort, and needs to succeed in attaining at least some of his goals
You can’t find secrets without looking for them
It is not a good idea to tell everybody everything that you know
Take the hidden paths
A startup messed up at its foundation cannot be fixed
Debate the large questions
When investing:
Study the founding team
Distinguish ownership, possession (who runs the company), control (who governs the company’s affairs
Your board should never exceed five people. Keep it small
Anyone who doesn’t own stock options or draw a regular salary from the company is fundamentally misaligned. You are either on or off the bus
For people to be fully committed, they should be properly compensated
Every company is a culture, a team of people on a mission
Since time is your most valuable asset, it’s odd to spend it working with people who don’t envision a long-term future together
Look or promise the opportunity to do irreplaceable work on a unique problem alongside great people
Internal problem is like an autoimmune disease
Advertising exists to embed subtle impressions that will drive sales later
Like acting, sales works best when hidden
The world is secretly driven by sales
Distribution is essential to the design of your product
Complex, personalized sales (seven figures or more) is the only way to sell some of the most valuable products. Every detail requires personal attention. It might take months to develop the right relationships. You might make a sale only once every year or two. Then you’ll need to follow up during implementation and service the product long after the sale is done.
Hustling toward bigger deals is long and methodical work
Poor sales rather than bad product is the most common case of failure
A product is viral if its core functionality encourages users to invite their friends to become users too
Computers are tools, not rivals
Seven questions that every business must answer
- Can you create breakthrough tech instead of incremental
- Is now the right time
- Are you a big share of a small market
- Do you have the right team
- Can you deliver, distribute your product
- Will your market position be defensible in 10 years
- Have you identified a unique opportunity that others don’t see
Doing something different is what’s truly good for society
The best problems to work on are the ones nobody else even tries to solve
Founders are important because they can bring out the best work from everybody at the company
The essential first step is to think for yourself
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