Zero to one

I felt like reading a classic among startup books again. “Zero to one” by Peter Thiel had been sitting on my shelf for quite a while. On vacation, the time had finally come and I got around to it.

Peter Thiel has often been criticized for his support of then-President Donald Trump and other right-wing populist groups. And as much as you may question him for his political views, his entrepreneurial talent is beyond doubt. I was curious to learn a bit more about Peter Thiel's views and what it means to him to start from zero to one.

In this book review, you'll find out why, after my initial skepticism about the author, the book won me over after all.

Throughout his book, Peter Thiel keeps coming back to the topic of monopoly. He holds the (very convincing) view that long-term profits – and by that he means really big profits – can only be achieved if you manage to build a monopoly with your startup in a small market. He criticizes that many entrepreneurs make the big mistake of rating their actual market too positively....after all, everyone claims to be unique.

We get valuable tips on what it takes to build a monopoly of your own, for example:

1. Proprietary technology
2. Network effects
3. Economies of scale
4. Branding

The book describes each of these points in much more detail, but I don't want to give away too much here.

Besides the company, we also learn what has to change on the side of politics and educational institutions to really reach the point of singularity in the future. At times that was very depressing, because in many places I caught myself thinking "yes, yes, it really is that bad".

“Zero to one” is for entrepreneurs and those who want to become one. It helps you think about the core elements of your company, such as the need to have not only technical people but also a sales force of your own.

We (engineers in particular) tend to glorify our product because of its technology and underestimate how hard it is to actually sell that product at a profit. This is exactly where the book can help you question yourself and your focus.

As an engineer, what I liked most was his criticism of us engineers! Yes, really. He often talked about how today's engineers lack big thinking. They focus too much on making minimal improvements to what already exists instead of daring to go for the potential next big thing. After all, it's precisely the engineers who should and must develop the solutions of tomorrow.

I found it easy to follow Peter Thiel's arguments. Unlike similar publications on the topic (e.g. Silicon Germany), he doesn't bring practical examples from companies, but instead shares important personal experience.

I liked his open criticism of companies being run by accountants, controllers or business people alone, which really spoke to me – it also reflects my own experience. According to Peter Thiel, it's fatal when companies are judged only by numbers. Tech companies in particular should be run by (visionary) technical people...accounting is a secondary discipline. You have to understand the product to be able to credibly create and stand for a shared vision and mission for the whole team. After all, a company's value is also measured by the profits it will make in the future.

For me, the icing on the cake was getting to understand the power law he mentions, as it contradicts my previous understanding (and I particularly like that): so far we have always learned to diversify, to spread ourselves broadly in order to minimize risk. But that's exactly the mistake! If we look at our professional and personal lives as a portfolio that we keep investing in, it's important to make only those investments that on their own have the potential to pay back all previous ones many times over. A startup simply cannot afford to <<diversify>>. It has limited resources and has to focus. That's exactly what we have to do in our private lives too, applying the rule of the power law again and again.

With “Zero to one”, Peter Thiel really managed to surprise me, and I got to know a different side of him. The small insights into his understanding of markets, politics and society are very convincing, clearly explained and make you think and question things.