Book Review: “Zero to One”
By Chris Wendel
4 out of 5 stars
224 pgs. Crown Business 2014
Softcover $15 eBook $10.99
Entrepreneur, author and venture capitalist Peter Thiel begins his book with a challenge to his readers: “What important truth do very few people agree with you on?”
The question forms the foundation of “Zero to One,” a deeper dive on the standard business startup book. Thiel, the founder of PayPal, believes firmly that beginning a business has to include an idea that is groundbreaking and bold enough that it will have no immediate competition, a monopoly of sorts. Which brings us back to the quote – built on the premise that a business should be founded on innovation that is creating and doing something totally new.
Instead of a business making slow steady improvements, Thiel believes it is better to risk boldness with a concrete (even if bad) plan than to be simply flexible to changing conditions. A competitive market environment, according to Thiel, doesn’t make a business stronger, it actually destroys profits that could be used for advancement and squelches the business’ ability to think for itself.
The book’s title, “Zero to One,” comes from the idea of instead of doing something familiar (zero to n), we need to foster more companies that can grow big ideas requiring exponentially high levels of ambition, thought and effort. The next Bill Gates will not build an operating system.
Thiel’s contrarian premise believes that “…we live in an age of technological stagnation, even if we’re too distracted by shiny mobile devices to notice. Information technology has improved rapidly, but there is no reason why progress should be limited to computers or Silicon Valley.”
Progress can be achieved in any industry or area of business. It comes from the most important skill that every leader must master: Learning to think for yourself.
Thiel’s idea of monopolies is important because monopolies can dominate a market long enough to produce sufficient profits to invest in new innovations. Monopoly businesses are also essential for solving impending world problems (i.e. having enough food, energy, and resources for the growing global demand).
The best example of a modern day monopoly is Google, which built itself in a way that was difficult for “competitors” such as Yahoo and Bing to replicate. Another example is Amazon, which began with the intent to become the world’s largest bookstore. Once it happened, Amazon expanded into other products to become the behemoth it is today.
Thiel’s experience of building PayPal is one of the most interesting, yet underemphasized, portions of “Zero to One.” The objective at PayPal was to dominate a specific niche, first as a payment solution with eBay before scaling the format to other areas and markets. Out of PayPal came what is known as the PayPal Mafia, a team of superstar entrepreneurs that included Elon Musk, founder of Tesla Motors, Reid Hoffman, the co-founder of LinkedIn, along with innovators that started the popular web sites YouTube and Yelp.
When the original group was assembled at PayPal, Thiel made every person that worked there responsible for doing just one thing. Each one thing was unique and employees were evaluated only on their one thing, thus eliminating conflicts over responsibilities.
“Zero to One” topped the New York Times’ business book bestsellers list last month. Its popularity has as much to do with its striking paradigm shifts as it does with its thought-provoking advice for business owners. Thiel’s oppositional perspective continues throughout the book and at times Thiel can be critical of standard business practices.
“Zero to One” is a hard-hitting book that challenges the old standards of business success. It’s inspiring to acknowledge there are still secrets to be learned, frontiers to be explored and new innovations to be revealed. “Zero to One” raises the bar for each of us to reach higher and aspire to do better.
Chris Wendel is with Northern Initiative in Traverse City. Based in Marquette, Mich., Northern Initiatives provides entrepreneurs with access to capital, information and new markets. www.northerninitiatives.com