

Eight Things I Learned from Peter Thiel’s Zero To One


Peter Thiel is an entrepreneur and investor. He co-founded PayPal and Palantir. He also made the first outside investment in Facebook and was an early investor in companies like SpaceX and LinkedIn. And now he's written a book, Zero to One: Notes on Startups, or How to Build the Future, with the goal of helping us “see beyond the tracks laid down” to the “broader future that there is to create.”

Zero To One is an exercise in thinking. It's about questioning and rethinking received wisdom in order to create the future.

Here are eight lessons I took away from the book.

1. Like Heraclitus, who said that you can only step into the same river once, Thiel believes that each moment in business happens only once.



2. There is no formula for innovation.

The paradox of teaching entrepreneurship is that such a formula (for innovation) cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be more innovative. Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.

3. The best interview question you can ask.



Most commonly, I hear answers like the following:


“America is exceptional.”

“There is no God.”


What does this have to do with the future?

In the most minimal sense, the future is simply the set of all moments yet to come. But what makes the future distinctive and important isn’t that it hasn’t happened yet, but rather that it will be a time when the world looks different from today. … Most answers to the contrarian questions are different ways of seeing the present; good answers are as close as we can come to looking into the future.

4. A new company’s most important strength


5. The first step to thinking clearly


“Madness is rare in individuals
— Nietzche (before he went mad)



Conventional beliefs only ever come to appear arbitrary and wrong in retrospect; whenever one collapses we call the old belief a bubble, but the distortions caused by bubbles don’t disappear when they pop. The internet bubble of the ‘90s was the biggest of the last two decades, and the lessons learned afterward define and distort almost all thinking about technology today. The first step to thinking clearly is to question what we think we know about the past.

Here is an example Thiel gives to help illuminate this idea.



2. Stay lean and flexible — “All companies must be lean, which is code for unplanned. You should not know what your business will do; planning is arrogant and inflexible. Instead you should try things out, iterate, and treat entrepreneurship as agnostic experimentation.”

3. Improve on the competition — “Don’t try to create a new market prematurely. The only way to know that you have a real business is to start with an already existing customer, so you should build your company by improving on recognizable products already offered by successful competitors.”

4. Focus on product, not sales — “If your product requires advertising or salespeople to sell it, it’s not good enough: technology is primarily about product development, not distribution. Bubble-era advertising was obviously wasteful, so the only sustainable growth is viral growth.”


1. It is better to risk boldness than triviality.
2. A bad plan is better than no plan.
3. Competitive markets destroy profits.
4. Sales matters just as much as product.”

To build the future we need to challenge the dogmas that shape our view of the past. That doesn’t mean the opposite of what is believed is necessarily true, it means that you need to rethink what is and is not true and determine how that shapes how we see the world today. As Thiel says, “The most contrarian thing of all is not to oppose the crowd but to think for yourself.

6. Progress comes from monopoly, not competition.





But the world we live in is dynamic: We can invent new and better things. Creative monopolists give customers more choices by adding entirely new categories of abundance to the world. Creative monopolies aren't just good for the rest of society; they're powerful engines for making it better.


Marx and Shakespeare provide two models that we can use to understand almost every kind of conflict.


To Shakespeare, by contrast, all combatants look more or less alike. It’s not at all clear why they should be fighting since they have nothing to fight about. Consider the opening to Romeo and Juliet: “Two households, both alike in dignity.” The two houses are alike, yet they hate each other. They grow even more similar as the feud escalates. Eventually, they lose sight of why they started fighting in the first place.”




8. Last can be first

You’ve probably heard about “first mover advantage”: if you’re the first entrant into a market, you can capture significant market share while competitors scramble to get started. That can work, but moving first is a tactic, not a goal. What really matters is generating cash flows in the future, so being the first mover doesn’t do you any good if someone else comes along and unseats you. It’s much better to be the last mover – that is, to make the last great development in a specific market and enjoy years or even decades of monopoly profits.


Zero to One is full of counterintuitive insights that will help your thinking and ignite possibility.

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