Are you planning to start a restaurant serving Indian or British food in downtown Palo Alto (or anywhere for that matter)? Do you think you have a unique advantage over your competitors that will enable you to survive the competition? Think again, says Peter Thiel, in his book “Zero to One”. “If you lose sight of competitive reality…. your business is unlikely to survive.” Peter dispels the notion that competition in undifferentiated commodity business is good for your business. Rather, he favors “creative monopoly” despite the notoriety the word “monopoly” has gained over the years.
The preamble of the book states “It’s easier to copy a model than to make something new: doing what we already know how to do takes the world from 1 to n”, but for any founder or investor to achieve exponential growth, he states “Every new creation goes from 0 to 1. This book is about how to get there.” Peter Thiel has reinforced this message throughout the book and supported it with good examples.
He strongly argues that starting up an undifferentiated commodity business will wipe away profits and leave the start-up struggling for existence. He argues in favour of “creative monopoly”; a monopoly that encourages creativity in developing new products such that the society as a whole will benefit from such monopoly. These monopolies invest their monopoly profits in long-term projects and research; competitive companies cannot invest long-term because they spend more time struggling to earn and keep their existing profits. He thinks we need more creative monopolies to power the world. Such messages seem to fly in the face of established economic theory; but the presentation of the content makes a compelling read.
There are intelligent nuggets all over the book that are very inspirational and useful. He ends the book with a key thought “We cannot take for granted that the future will be better, and that means we need to work to create it today.”
The book is written in easy, lucid style in layman’s language. The book captivates the imagination; I read it twice in succession to imbibe the philosophy presented by the book. The book gives an insight into why some start-ups are more successful than others. That makes this book more relevant to today’s world than ever before. If you are a start-up or are planning one, you must read this book. For the rest of us, it makes a very absorbing read nevertheless.