Tips for Startups From Peter Thiel
By: Aidan Wilson
Tags: Work, Business, Startup, Future, Productivity

Tips for Startups From Peter Thiel

5 notable pieces of Zero to One: Notes on Startups, or How to Build the Future

I recently decided to read the popular book by Peter Thiel and Blake Masters titled, Zero to One: Notes on Startups, or How to Build the Future. While reading, I took some notes that I felt were important and needed to be shared.

All quotes are taken straight from the book Zero to One: Notes on Startups, or How to Build the Future.

1. Every Moment in Business Happens Only Once

The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin will won’t make a search engine. And the next Mark Zuckerberg wont create a social network. If you are copying these guys, you aren’t learning from them.

Entrepreneurs and founders need to be different and create new things. The most successful entrepreneurs in the world had a new idea that the world needed even if people did not know they needed it. The most important part about this idea was that it was something new.

What we should learn from the already successful founders mentioned above is that we should be discovering and creating new things to change the world. While it is easier to reinvent the wheel, creating a new method or significantly modifying the original method for the better is a much more lucrative and beneficial option for startups. Focus on creating new things that people may not know they want or need.

These new technologies or ideas mixed with a startup also have the potential to reach the point of becoming a monopoly (discussed later), which if handled properly, will lead to extreme success.

2. Teamwork is Necessary for Startups

Small groups of people bound together by a sense of mission have changed the world for the better… It’s hard to develop new things in big organizations, and it’s even harder to do it by yourself.

Having a solid like-minded team willing to put in the work to achieve a shared goal is essential to any startup, especially a startup in the early stages. No matter how much weight entrepreneurs want to believe they can carry on their own, it is still true that two brains are better than one. Peter Thiel wrote in his book, “it’s very hard to go from 0 to 1 without a team”.

That being said, the types of people who inhabit your team are very important. You cannot work with just anyone. This team, especially in the foundational stage, must consist of trustworthy people who all work well together towards a mutual goal.

3. Build a Strong Foundation in the Beginning

A startup messed up at its foundation cannot be fixed.

A building with a weak base is doomed to crumble. Like most things, the same goes for startups: a startup with a weak base is doomed to collapse. Founders and entrepreneurs need to be very careful during the early stages of their startups because the wrong decision can ruin the company’s foundation and lead to failure.

As a founder, your first job is to get the first things right, because you cannot build a great company on a flawed foundation.

One of the most important foundational steps for all founders is choosing who to begin building the company with. This includes choosing co-founders, board members and employees. As mentioned earlier, teamwork is essential to a startup’s success.

Trouble between founders will never end well for the company. Peter Thiel recommends that co-founders know each other prior to starting the company and get along well together. Otherwise, differences between them could cause unwanted and fatal damage to the startup.

The book also mentions that a company’s board should be kept small, such as around three members. Too big of a board and vital communication can be lost. Too small of a board and the board members could exercise their power and cause conflict.

The beginning stages of any company are the most important. This was stressed throughout the book. A successful company will get a strong foundation secured before building up into the windy and often chaotic world of business.

4. Build a Monopoly

All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape the competition.

When I read this, I did not see it as a suggestion. Instead, I took it as a rule of the startup world. To reach the most success possible, a startup must position itself as a monopoly.

Startups should aim for ruling a niche market with as few competitors as possible (preferably none), then progress and expand out from there. It is better to rule a niche market than to compete in a company-saturated market.

Going along with this theme of creating a monopoly, Peter Thiel also mentions how monopolistic companies should act and present themselves: by denying their monopolistic traits, and appearing to be in a competitive market.

Non-monopolists exaggerate their distinction by defining their market as the intersection of various smaller markets. Monopolists, by contrast, disguise their monopoly by framing their market as the union of several larger markets.

Once a company is a monopoly, it is better to not present itself as one to avoid any negative attention.

5. Avoid Competition

If you can recognize competition as a destructive force instead of a sign of value, you’re already more sane than most.

Going along with the idea of creating a monopoly, founders should not aim to flood a vibrant competitive market, but should instead focus on finding a niche market with little to no competition. Not only could this lead to a monopolistic startup, but it takes the focus away from the competitors and places it on the customers, product(s) and the ultimate goal of the startup.

Competition creates a war, and war is destructive and never has a true winner. As Peter Thiel put it, “war is a costly business” and it is simply not worth the stress and time for startups to focus on it. Instead, avoid the war and adversaries and focus on the inner workings of the startup itself.