Top Heresies of Zero to One

Zero To One
A former colleague recently sent me a couple copies of Peter Thiel’s Zero to One with the instructions: “Read and pass on.” As a voracious reader of startup non-fiction, I would’ve eventually read the book by the former co-founder of PayPal. But since it came as a gift from a respected former colleague, I made it the top of my reading list in spite of know nothing about Thiel other than what you hear from geek pop culture (e.g. PayPal, Thiel Fellowship, Peter Gregory from Silicon Valley, seasteading). But I suspected anyone who named an investment fund after a precious metal from Lord of the Rings can’t be half bad. Right?

The book turned out to a pure pleasure: short, high content density, full of thought provoking ideas and Silicon Valley heresies. It almost reads like a collection of non-fiction stories loosely connected by a theme. So if you haven’t read, pick up a copy and kick back for an enjoyable and thought-provoking read.

Here is my personal list of top 5 heresies from Zero to One:

#5: Incremental Thinking Is Bad

As much as I like the mantra of thinking big (0 to 1) instead of incrementally (1 to n), I couldn’t help but wonder if he really believed in the wrongness of the iterative, lean, experimentation culture that has become the standard in the post-dotcom world. Didn’t PayPal survive and then prosper post-bust precisely through this same lean / incremental philosophy? I like to think Thiel actually meant: executing a lean approach in the context of a big vision is good - but executing it as a replacement for a big vision is profoundly wrong.

#4: Monopolies Are Good

Anyone who takes a close look at the astounding non-search innovation Google has brought the industry in the last decade will almost certainly admit we’ve all benefited from their search monopoly. But as much as I agree with the sentiment that a Google search monopoly has been good, it’s hard to forget that our almost 200 year history of monopolies since the Industrial Age has been anything but good. I think what separates modern tech monopolies is not that they are “dynamic”, but that they exist in the post-Microsoft antitrust era, with full awareness of the risks of being “evil”. So while aspiring to build a monopoly and have “last mover advantage” can be a great entrepreneurial goal, history suggests the future is likely to bring more Microsoft monopolies than Google.

#3: We Are Indefinite Optimists

The idea that we are stalled in an era of indefinite optimism, where we believe the future will be better but have no definitive conception of how, really struck me. The heresy is that I’d go a step further in saying we may have a distinct streak of indefinite pessimism (e.g. more commonly seen in Millenials). As profoundly wasteful as the Dotcom Boom era proved to be, everywhere you went in the mid to late 1990s were people thinking they could change the world. In a world of Ebola, Ukraine, and ISIL, it would be nice to get back to a little hard-core optimistic thinking.

#2: Competition Is Bad

No one would argue that if faced with a choice between building a fast growing business with or without competition, every entrepreneur would choose no competition. But sometimes lack of competition in an early market is really just another word for a lack of a market. Also sometimes the competition you face in early markets helps you hone your product and business, and can even steer you to more open and productive markets. I like to think what Peter Thiel really meant to say is: aspire to build businesses in which you can be the dominant provider in a fast growing market, and achieve this goal through as little destructive competition as possible.

#1: East Coast Pinstripe Suits

Thiel's claims people on the East Coast "all wear the same skinny jeans or pinstripe suits” is simply not true. We Bostonians and residents of the People's Republic of Cambridge sometimes adventure into subtle prints or even neutral on neutral in our suits. I even once saw someone in Boston tech come to work without a tie.

Non-Heresies

There are many things in Zero To One that I couldn’t help but smile and nod my head in agreement at. Some examples: the seven questions, the importance of the salesman, the 10x product, competition can be destructive, the network effect, last mover advantage, luck can be made, the importance of the power law, and thinking big.

So if you haven’t picked up your copy, now is a good time to see what thoughts Peter Gregory… I mean Peter Thiel… will provoke in you.


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