Zero to One: A guidebook on hidden truths, business secrets and why monopolies are good!

Photo: Collected

Leo Tolstoy's Anna Karenina begins with the famous line, "Happy families are all alike; every unhappy family is unhappy in its own way".

Peter Thiel, the famous German-American entrepreneur and venture capitalist, believes the exact opposite when it comes to entrepreneurship.

He believes that all happy (successful) companies are different and unique whereas the failed ones are caught in the same cycle of competition, which brings them less and less profits each year, until they go out of business.

Thiel explores all these and more in his 2014 book "Zero to One". The book, co-authored by Blake Masters, discusses some major problems and challenges that entrepreneurs face nowadays.

Despite being half a decade old at this point, it is quite relevant for today's young aspirants who wish to set up their own startups in the future.

Thiel is a highly successful venture capitalist and billionaire entrepreneur. He founded PayPal with a few of his colleagues which was sold to eBay for $1.5 billion in 2002. He has also been engaged with many other projects such as Palantir, Facebook, Y Combinator and so on, over the years.

In "Zero to One", he seeks to share his ideas, which he believes will help out young entrepreneurial aspirants. To that end, the author explains the importance of 'contrarian truths' and the power of imagination.

Catch the niche market!

The book argues that anyone who seeks to jump into a huge market that already has a lot of competitors has a poor chance of succeeding. Instead, it is more favourable to begin with a specialised area of the market.

Just like Amazon began its journey by delivering books before becoming a multinational giant, a young entrepreneur should go for a specialised and unique section of the market. This will allow the new business to better its services creating a good impression and an eventual brand value if the founders do it right.

The book lists many examples of this and explains how this could turn out to be the main difference between the success and failure of a company.

Find the hidden truths!

"Think of a unique idea" is not a unique statement for anyone engaged in startups and entrepreneurship. Everyone agrees that you need to provide a particular product or service that people would want, yet are not available at the market.

But what we usually miss here is that people end up copying someone else's invention while trying to invent something new and unique. 

As Peter Thiel believes, the next Facebook will not be Facebook. You cannot imitate Amazon's business model if you want to create the next big delivery service!

If somebody seeks to recreate Google, Facebook, Apple and others' success through imitation, they would fail. These are unique companies with unique ideas.

The author believes we must search for truths or ideas that may not be agreed upon by a large section of the population. An idea that others find hard to work with will give you the head-start to capture the market share you need to dominate that field.

Marketing!

Another thought that may seem to be a 'cliché' to many is this book's take on marketing but it is a necessary part of the whole argument the book attempts to make.

In the chapter playfully named 'If You Build It, Will They Come?', the book says:

"If you have invented something new but you have not invented an effective way to sell it, you have a bad business - no matter the product." 

This has been true for every business, every time, across human history. Every product or service needs a good presentation to reach the consumers, which is why the author believes the "Nerds" at Silicon Valley require "Salesmen" and is also the reason why the US sales industry was worth $450 billion (annual figure) even in 2014!

Monopoly is good!

The relation between capitalism and competition, as described by Peter Thiel, is one of the cornerstones of the book. He disregards the long-held idea that capitalism and competition are synonymous. 

They are NOT! The author describes capitalism as something that seeks to accumulate capital while competition lessens it. It is not every day that you hear a successful businessman call "Monopoly" a good thing!

The book suggests every entrepreneur should strive for an end where they would dominate the market in a particular sector.

In Peter's judgement, Google could not achieve its success or invest huge sums of money to make their services better if they had not had a monopoly (66% market share among all search engines in 2014).

Also, there is the fact that monopolies have more money and better infrastructures, which they can use to get a bigger share of the market and have more revenue!

Just like Facebook's massive user base helps it to dominate the social media sector, Amazon can utilise its infrastructure to expand its business to every part of the world while maintaining a low cost for its services. 

But the book warns that a monopoly cannot sustain itself indefinitely. A business must have a good future prospect in order to keep ascending.

In 2013, Twitter was valued at $24 billion - 12 times more than the New York Times' market capitalisation, even though the Times earned $133 million in 2012 while Twitter lost money.

Since, the prospect for future cash flow in the case of Twitter compared to The Times was much better, this bizarre scenario occurred. People started to believe Twitter would be able "to catch monopoly profits'' in the future unlike the newspaper.

"Zero to One" also comments on successful businesses as well as failed ones, which may provide the readers with insights they need to be successful themselves.

Business models and how they have impacted society are discussed vibrantly with examples of people like Elon Musk, Steve Jobs, Mark Zuckerberg, as well as the author himself.

The book, apart from its commendable arguments and insightful comments, is enriched with necessary graphs and a narration that is done in fun, lucid language.

From a literary perspective as well, the book is a fun read as it explains things with interesting events and literary references. For a book on entrepreneurship, I was surprised to find out so many quotes and allusions of all kinds of literary works, from Hamlet to A Hitchhiker's Guide to the Galaxy.

The book has been a best-seller for years and is available in every major international as well as Bangladeshi online bookstores.

It is a must-read for all the aspiring entrepreneurs out there, and it can be an enlightening experience even for those who are not fans of the genre.

If not anything else, the book would at least help the readers to take inspiration for building a brighter future, as the author mentions:

"...the essential first step is to think for yourself. Only by seeing our world anew, as fresh and strange it was to the ancients who saw it first, can we both recreate it and preserve it for the future."