3 Key Ideas for Success in Business - From Peter Thiel's Zero to One Book

Peter Thiel is an American entrepreneur venture capitalists and hedge fund manager. He co-founded paypal with Max Levchin and Elon Musk. He is ranked fourth on the Forbes list 2014 at 2.2 billion dollars.
Disclaimer: This post contains an adapted version of the transcript from this video, where Peter Thiel presents his book Zero to One.

1. Don't Copy Successful Entrepreneurs

Every moment in the history of business, every moment the history of Technology happens only once. The next Mark Zuckerberg will not be building a social networking site. The next Larry Page will not be building a search engine. The next Bill Gates will not be building an operating system company. If you're copying these people, in some sense you're not learning from them. And this is why there is no science to business. Science starts with things that are repeatable and experimentally verifiable in one way or another. But every great company is one-of-a-kind.

So, how will the next one-of-a-kind company start?

Tell me something that's true that nobody agrees with you on. 

These are often quite hard questions to answer because it often requires courage to go against conventional wisdom. But those are the very questions we have to ask ourselves if we want to be successful entrepreneurs. It's not about directly copying Mark Zuckerberg, Larry Page or Bill Gates. It's about copying the way of thinking that lead them to discovering a unique truth that nobody saw.

2. Aim for Monopoly

If you are a founder or an entrepreneur what you want to aim for is monopoly. You want to aim to
build a company that is one-of-a-kind, and that's so far differentiated from the competition that it's not even competing with them. This goes against the conventional wisdom that claims that capitalism and competition are somehow synonyms.

A capitalist is someone who is in the business of accumulating capital. A world of perfect competition is a world where profit is being shared among competitors, which is a nightmare for a capitalist.

If you want to compete like crazy you should just open a restaurant in Chicago. But think about Google. It has had no serious competition in search since 2002 when it definitively distanced itself from Yahoo and Microsoft. As a result of this it has been generating enormous cash flows for the last 12 years.

The people who have monopolies don't talk about it. They pretend not to have monopolies for obvious reasons. And the people who don't have monopolies and pretend to have something unique about their business is because otherwise nobody would invest or give them any money.

Therefore, if you have a monopoly like Google you will pretend that you are in a much larger market so you'll never talk about the search business and say:

We have a sixty-six percent share of the search market and we're much more dominant than Microsoft ever was with the operating system market in the nineteen nineties

You will instead say:

We are a technology company and since technology is such a vast space we're competing with apple on iPhones, we're competing with facebook on social, and since we're going to build a self-driving cars we're competing with all the car companies in Detroit.

Conversely, if you were to start a restaurant and you talked to various investors you may want to try an idiosyncratic story that says that yours is a one-of-a-kind restaurant, completely unique and very different from all the others. It's the only British-Nepalese fusion cuisine in downtown Chicago.

3. Competition is for Losers 

We always think that the losers are the people who can't compete effectively enough. The losers are the people who are slow on the swim team in high school. The losers are the people whose grades or test scores aren't quite good enough to get into the right universities.

So, the idea that somehow competition itself is something that we are perversely attracted to is very counter-intuitive.

Competition is always this very-to-edge thing. When you compete ferociously you will get better at that which you are competing on, but you will always narrow your focus to beating the people around
you. And that often comes at this very high price of losing sight of what is more important, or perhaps more valuable.

Continuously looking for opportunities to compete, is not just this intellectual failure, it's also this thing where you have a tiny door where everyone's trying to rush through, and then maybe around the
corner there is a secret gate that no one's taking. You should always find the secret path and then go ahead and take the price.

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