Peter Thiel was one of the co-founders of Paypal, was the first outside investor in Facebook (you may have seen Peter being portrayed in the film – The Social Network). He has founded and funded many other billion dollar companies.
I recently read Peter’s book, ZERO to ONE, which is essentially a self-help book for entrepreneurs. I thoroughly enjoyed the book and came away from it with a modified outlook on how to approach the various entrepreneurial projects I’m involved with.
For this month’s blog post I thought it’d be valuable to share my take-aways from his book with you. Here you have 10 important ideas from the book that stood out to me personally (idea #9 is probably the most important in my opinion).
NOTE: These ideas are for people who are building (or want to build) a breakthrough innovative business.
For example, a new system for selling online that would be 10x better than Shopify, Wix or any other platform (a significant leap forwards).
Or a new approach to content marketing that offered massive reward for the content creator AND the publisher (something that doesn’t exist today).
Or a new innovative technology-based approach to helping local businesses win their marketing battles, without needing to hire a full time Marketing Manager or anyone else for that matter (something Steve and I are working on).
The ideas below are *not* designed for folks following the trodden path or using an existing blueprint (Kibo Quantum, Infinity, etc).
1: SEARCH FOR SECRETS.
Every great business is built around a secret that is hidden from the outside, meaning you need to search for secrets where no one else is looking. Another way of thinking about this is what valuable company or product is nobody building.
2: CREATE A MONOPOLY.
In order to do this, you’ll need to find value in an unexpected place and then be the last mover in that space, not just the first mover (ie. Google in search, Windows in operating systems, Paypal in online payments).
3: SOLVE THE NONSENSICAL.
The best projects and problems to work on are the ones that no one else tries to solve, that don’t make sense to anyone else and that big companies can’t see (and would not focus on even if they could).
4: START SMALL AND SCALE UP.
Start by solving a problem for a small market then scale up from there. If you can dominate the most important segment of a particular market and implement a viral effect whereby one user invites another, you will win (ie: Amazon started with books, Facebook with Harvard. Paypal with Ebay PowerSellers. Uber with San Francisco).
5: CAPTURE VALUE.
Not only do you need to create value, you need to capture value. For instance, Google creates value and captures billions of dollars. Airlines create massive value but haven’t made any money in a hundred years. Be sure that it is possible to make money.
6: AVOID COMPETITION.
Don’t relish competition… AVOID competition and never compete directly against entrenched competition. If you do, your profits will be competed away, especially if you have an undifferentiated commodity product.
7: DO SOMETHING COMPELLING.
You need to be doing something that is unique, compelling and important that cannot be easily copied by China, or anyone else. Unless you are solving a real problem in a superior way, people won’t care.
8: MASTER ONE DISTRIBUTION CHANNEL.
Try for several distribution channels depending on what type of products or services you are selling – but aim to master one. If you can master one distribution channel, you will have great business.
9: DON’T IMPROVE INCREMENTALLY.
Do not build a business by improving incrementally – create a product or service that is instantly x10 better than anything else on the market. Whatever you create can’t be just a little bit better than existing similar products, it needs to be MUCH better. If it isn’t, people will simply go with existing, trusted brands. For example, Apples original iPad was a dramatic improvement on tablets that came before it.
10: FIND COMPATIBLE FOUNDERS.
You need the right team and compatible founders from the outset, as a company that is messed up at its foundation, cannot be fixed. Search for people who are great at the things you are bad at.
These ideas are taken from ‘ZERO to ONE’, by Peter Thiel.
Check out more of my recent reads here: www.AidanBooth.com/books
What are you reading? I’d love to hear about it, leave a comment below!