Alpha Explorer

Zero to One

Zero to One is a book published by Peter Thiel. It mentions key concepts about how to create and invest in startups. Zero to One means being creative and coming up with something new, while 1 to n means doing the same thing everyone is doing because you know it works. 1 to n results in more competition because everyone is doing the same thing, so it results in fewer profits as they are divided among the companies. Examples of such companies include restaurant businesses, airline businesses, etc. On the other hand, going from zero to one increases monopoly as you have little to no competition. Some examples are Google, Facebook and Amazon as they each have little to no competition and dominate the market. He talked about different parts of history, such as the dot-com bubble, the cleantech bubble, and other bubbles and how most turned out to be a bust. In addition, he demonstrated that when investing, you must not always try to diversify your portfolio, although that is the safe option. But must pick one stock that returns more than all of the other stocks combined, and the same follows down the order. This is called the power law. He also talked about the seven questions that a business must ask itself, which are the Engineering Question: Can you create breakthrough technology instead of incremental improvements? The Timing Question: Is now the right time to start your particular business? The Monopoly Question: Are you starting with a large share of a small market? The People Question: Do you have the right team? The Distribution Question: Do you have a way not just to create but also to deliver your product? The Durability Question: Will your market position be defensible 10 and 20 years in the future?, and The Secret Question: Have you identified a unique opportunity that others don’t see? Overall, this book discusses how to be creative and innovative and start a business and how that helps you monopolize your business in the long term.