Far and away the most thought provoking book i’ve read in awhile. Peter Thiel, Paypal co-founder, distills his years of experience founding and investing in startups down to a ‘disciplined’ 200 page book.
An original thinker, Thiel challenges readers from the first page:
What important truth do very few people agree with you on?
This simple question is deceptively hard to answer. The question has revealed me as more conventional than perhaps I’d like to admit. Here’s my stab at a ‘good’ answer (his criteria):
Most people believe that educators are responsible for motivating students, but the truth is, educators should spend their time ‘educating’ already-motivated students.
Most people believe entrepreneurs are only born, not made; but the truth is entrepreneurship can be taught (but perhaps not to everyone).
Regardless of the answer, simply asking yourself these questions forces you to examine assumptions and convention.
The section on monopoly is compelling. Thiel argues that competition and capitalism, far from being synonymous are actually antithetical. In a world where competition is praised, Thiel argues that monopoly is better. In our world, a dynamic world, monopolies create ‘new categories’ of abundance for people. Rather than the traditional argument that monopolists as ruthless rent-collectors; which, he argues, is only true in a static world.
Much of the book builds on this argument that founders/investors should strive for monopoly as Thiel describes their characteristics and how to go about recognizing and exploiting ‘secrets’ that allow people to build truly valuable companies.
As a faculty member in a program designed to train future social entrepreneurs, two sections caught my eye in particular. Thiel argues that most businesses in competitive markets have to fight hard for survival, squeeze out every ounce of efficiency and are geared towards ruthlessness. Alternatively, he argues:
“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 its impact on the wider world” (Thiel & Masters, 2014, p. 31).
In the third to last chapter, Zero to One has a sub-section called The Myth of Social Entrepreneurship. Here, Thiel argues that social entrepreneurs trying to achieve both social and financial goals, often end up achieving neither. Instead, they should focus on being different. He argues:
“Just as corporations tend to copy each other, nonprofits all tend to push the same priorities…Doing something different is what’s truly good for society – and it’s also what allows a business to profit by monopolizing a new market” (Thiel & Masters, 2014, p. 166).
This begs the question:
What if monopolies, contrary to how they’re portrayed in the media, are actually in the best position to make a significant, durable social impact? What if the social enterprise movement is wasting its time supporting enterprises in crowded, competitive markets (e.g., another coffee producer) that are at best only going to make an insignificant, unsustainable social impact and at worst, not going to create either financial or social value?
At the very least, we have an obligation to discuss, dissect and debate these ideas. Thiel doesn’t get everything right. He equates ‘lean’ (startup) to a lack of vision and planning which may be too simplistic a reduction. He does go on to clarify that lean is a methodology, not a goal. After all, Thiel would be first to argue there is no replacement for a difficult, yet inspiring vision, particularly a unique one.
I have a feeling the ideas in this book are going to be a nagging splinter in my mind for years to come. Required reading.