This ppt is summary of the famous book zero to one written by Mr peter theil with blake masters.

1. ZERO
Book Summary
TO
ONE

2. Group Members-
• Krish Kulshrestha
• Aaryan vij
• Prakarsh Singh
• Risha Agarwal
• Vaishnavi
• Aviral Bajaj
• Abhiram
• Ayesha Garg

3. • The book " zero to one " is a self help , business startup book written
by Mr Peter Theil.
• Theil is a billionaire entrepreneur and a venture capitalist . He is the
co-founder of PayPal , Palantir Technologies and Founders fund , and
he was the first outside investor of Facebook.
• He co-wrote this book with Mr. Blake Masters ,who is also an venture
capitalist , author and President of the Theil Foundation.
• With his years of experience spotting unique business ideas, Theil
put together the zero to one
Peter Thiel

4. ZERO TO ONE by Pete
The book was published in 2014 and weighing 224 pages.
If you want to build a better future, you must
believe in secrets. The great secret of the time is
that there are still uncharted frontiers to explore
and new inventions to create. In Zero to One
legendary entrepreneur and investor Peter Thiel
shows how we can find singular ways to create
those new things. The book presents at once an
optimistic view of the future of progress and a new
way of thinking about innovation: it starts by
learning to ask the questions that lead you to find
value in unexpected places.

6. • The chapter starts with the discussion around at Peter’s favorite
interview question:
• What important truth do very few people agree with you on?
• He says the question is it challenging because it requires
respondents to:
• Reflect and talk about knowledge they've created for
themselves (not taught in schools)
• To become socially unpopular by taking a different stance
• He justified this approach by saying that brilliant thinking is
rare but courage is even shorter supply than genius.

7. • By continuing the argumentation around how
hard it is to imagine something that doesn't exist
and predict future solutions the author proposes
the following graph to differentiate progress as
we see it today by creating a distinction between
vertical intensive progress (technology 0 to 1) and
horizontal extensive progress (globalization 1 to
n)
• Why startups?
• Start-up = largest group of people you can
convince of a plan to build a different future.

8. Party like it's 1999

9. Economic landscape of that period:
 1990-- economical migration of investments in USA
“from bricks to clicks”
 1997-- economical crash in Thailand
 1999-- launch of the euro
 1998 to 2000—dot.com mania
 PayPal was founded in 1998 with the goal of creating
a new internet currency to replace $1 and managed
to raise funds in 2000 right before the dot.com crash.

10. All happy
companies are
different

11. • All happy companies are different: each one of them
earns a monopoly by solving a unique problem. All failed
companies are the same: they failed to escape
competition.
• Remember the first “contrarian “question, Peter’s next
favorite question is:
• What valuable company is nobody building?
• Valuable company = Create value + capture value
• The lesson for entrepreneurs? If you want to create and
capture value don't build an undifferentiated commodity
business.

12. The author makes the difference between monopoly vs
perfect competition and explains how both this type of
companies is trying to disguise themselves:

13. Examples disguise monopoly: Google has a monopoly on
search but emphasizes the small share of global online
advertising.
Example disguise perfect competition: tries to find a fake
differentiator “only British restaurants in Palo Alto”

15. Description of American society obsessed with competition.
• Analogy of war and peace ever-present in business. MBA
students carry around copies of Clausewitz and Sun Tzu.
• War metaphors in business language: headhunters, captive
market, make a killing.
• Why do people compete?
• Marx model = because they have different ideas and goals
• Shakespeare model = all combatants that look more or less
alike (ex: Montague vs Capulet)

16. War (in business like everywhere else) is destructive: while
Microsoft and Google were obsessed to compete with each other
Apple came along and overtook them (500 billion $ Market
capitalization Apple vs 467 billion $ Google + Microsoft)
· Examples of how far competition can go: square copycats.

17. Last Mover
Advantage

18. • Value of business today = value of earnings in the future
• Twitter vs New York Times
• Twitter 24 billion $ valuation (2013 IPO) = 12 * New York
Times market cap
• Wonder why?
• Twitter—holds monopoly of the future while publishing
houses are losing business everyday
• Twitter had more cash flow
Characteristics of a monopoly:
• Proprietary technology (ten times better than any
existing solution)
• Network effect (start with a niche market)
• Economy of scale
• Excellent branding

19. Building a monopoly:
• Perfect target market for a start-up is a small group of
particular people concentrated together and served by few
or no competitors.
• Once you dominate a niche market expand to adjacent
markets (always expand, example Amazon and eBay)
• Don’t disrupt (act of creation is more important; example:
PayPal worked with Visa VS Napster and music industry)
• The last will be the first, instead of the first mover
advantage make the last great development in a specific
market and reap the fruits of a mature ecosystem.

21. Question of the day: Can you control your
future?
• If you treat the future as something definite it makes
sense to understand it in advance and to work to
shape it. But if you expect an indefinite future ruled
by randomness, you'll give up on trying to master it.
• Example of number of extracurricular activities
required to enter elite colleges and making the
argument that process trumps substance.
• You can expect the future to be better or worse than
the present and based on this assumption the author
draws the following graph.

23. • Indefinite pessimism: Europe since 1970s, today Eurozone is crisis,
nobody is in charge, don't know when the crash will happen,
enjoy life meanwhile = vacation mania
• Definite pessimism: from China perspective economic growth
cannot come fast enough, rich people try to take money outside,
poor people prepare for the worst as they know the current
growth is not sustainable
• Definite optimism: Western world before 1970s (big plans that
were executed: Empire State Building, Panama Canal, Apollo
program.
• Indefinite optimism: finance eclipsed engineering as the way to
approach the future. Baby boomers used to effortless progress,

24. Follow the
money

25. • Pareto principle or 80-20 rule: Vilfredo Pareto
discovered that 20% of people owned 80% of the land
in Italy.
• The power lay becomes visible when you follow the
money: in venture capital, investors try to profit from
exponential growth in early-stage companies, a few
companies attain exponentially greater value than all
others.

26. Secrets

27. Why aren't people looking for secrets?
• Most people act as there are no secrets left to find.
Example of geography.
What happens when a company stops believing in
secrets?
Examples of Hewlett Packard:
• 1990 company worth 9 billion $
• 2000 after a decade of inventions (first affordable color
printer, first super-portable laptops) worth 135 billion $
• 2005 worth 70 billion $ (failed to merger with Compaq,
failed consulting /support shops)
• 2012 worth 23 billion $ as a result of the abandoned
search for technological secrets

29. • Example Fermat's Last Theorem: after 358 years of
fruitless inquiry by other mathematicians was
demonstrated by Andrew Wiles in 1995.
• The best place to look for secrets is where no one else
is looking
• Examples of nutrition where most of the policies were
influenced by lobbyists and scientific assessments and
discoveries are yet to be developed.

30. Founda
tions

31. Beginnings are special. They are qualitatively different from
all that comes afterward.
• Ownership, foundation and control
• Ownership = who legally owns a company’s equity?
(Founders, employees, investors)
• Possession = who actually runs the company on a daily
basis? (managers)
• Control = who formally governs the company's affairs
(board of directors which includes founders)

32. On the bus or off the bus: everyone should be
involved full-time
• Cash is not King & Vested interest: startups don't
need to pay high salaries because they can offer
something better, part ownership of the company
itself.
• Equity can't create perfect incentives, but it's the
best way for a founder to keep everyone in the
company broadly aligned.

33. The Mechanics of the
Mafia
• Recruiting Conspirators, Culture (hoodies?), Do one thing, build a cult.

34. If youbuildit, will they come?

35. Short answer: no
• Startups should care about sales just as much as
they care about the product. The distribution is
the bottleneck for a business.
• Primer on how to sell a product
• CLV (Customer lifetime value) CAC (Customer
acquire cost)
• The more expensive the product-- bigger sales
cost-- more important to sale
• Look around, if you don’t see a salesperson,
you're the salesperson

37. Complementarity human-machine vs robots will take
our jobs
Globalization = substitution, Technology =
complementarity.
 Example Igor (PayPal):
 Mid-2000 PayPal was losing a 10 million $/month
because of credit card fraud (impossible to review
thousands of transactions per minute)
 Elite team mathematicians solve problems
algorithmically
 fraudsters were learning and breaking the new rules
fast

39. Solution: assemble a team of human analysts to review
most suspicious transactions flagged by the algorithm.
 This hybrid system was named “Igor” after the
Russian fraudster who claimed he will never be
caught.
 PayPal records first profit in 2002 vs quarterly loss of
29.3 million $ one year before
 This hybrid solution has been used by the FBI for
detecting fraud and later inspired creation of
Palantir.

41. Most cleantech companies crashed because they neglected one or more
of the seven questions every business should answer:
1. The Engineering question: Can you create breakthrough technology
instead of incremental improvements?
2. The Timing question: Is now the right time to start your particular
business?
3. The Monopoly question: Are you starting with a big share from a small
market?
4. The People question: Do you have the right team?
5. The Distribution question: Do you have a way to deliver your product?
6. The Durability question: Will your market position be defensible 10 and
20 years into the future?
7. The secret question: Have you identified a unique opportunity that
others don’t, see?

42.  About Social Businesses: hundreds of
undifferentiated products all in the name of one-
broad good.
 Corporate green = NGO goodness
 Challenge for entrepreneurs to create energy 2.0 is
to think small.

43. The
founders
paradox

44. • Founders are important not because they are the
only ones whose work has value but rather
because of a great founder can bring out the best
work for everybody at his company
People distribution of traits vs Founders
distribution of traits

45. The lesson for founders is that individual prominence and
adulation can be exchanged for individual notoriety and
demonization at any moment
• The greatest danger for a founder is to become so
certain of his own myth that he loses his mind. But an
equally insidious danger for every business is to lose all
sense of myth and mistake disenchantment for wisdom.

46. Conclusion
Five main lessons from the book-
1. Technology will be the future.
2. Create a monopoly
3. Co-founders are important
4. Create a Cult
5. Piece it together