The author of "From 0 to 1" is an American entrepreneur and venture capitalistPeter ThierHe is the co-founder of PayPal and Palantir and the first outside investor in Facebook. He has a degree in philosophy and law, but he has made a name for himself in the world of technology and venture capital. His unique perspective on the business world was a huge inspiration to me who had no business mindset before.
Much of the content of this book comes from a course the author took at Stanford Law School, Information Science: New Ventures, so the content of the text is very much like a reproduction of spoken language in class, and it reads very smoothly, full of stories and inspiration.
If I want to say that this book has inspired me the most, it belongs to this sentence:What are the facts that you disagree with others, but that you think are important?In other words, most people believe in something, but the truth is the opposite of something. When we can see and find such things, it is equivalent to discovering a pain point, and as long as we can solve this pain point, we can create business value.
What is from 0 to 1?
From the perspective of human history, progress does not happen automatically, but a small group of people create imaginary technology. The author believes that the progress of human civilization is divided into two types, namely horizontal or extended progress and vertical or intensive progress.
The firstHorizontal or extended progressIt's about copying someone else's already successful approach, like going from 1 to n on a number. From a broader perspective, it's like McDonald's first established itself in the United States, and then replicated this successful model to establish stores around the world. McDonald's has successfully operated in the United States, which is 1;After that, the global exhibition store is n.
The secondVertical or intensive progressIt's about developing something completely new, like going from 0 to 1 (hence the title of the book). If there's one word to describe this progress, it's technology, which refers to the invention of new, or better, ways of doing things. Like the original catering culture, the production speed is not fast, the efficiency is not high, and the waiting time is very long, which is 0;McDonald's saw this pain point and set out to solve it, and developed an ultra-efficient fast food assembly line, which greatly reduced the waiting time for meals, which is 1.
The author points out a particular point: Most people think that globalization will define the world of the future, but the fact is that technological development has a greater impact than globalization. What he means is that if technology continues to advance, it will be a major environmental disaster for the future when other countries all follow the current American lifestyle and use only today's old technology. If we just replicate the old ways of creating wealth from 1 to n, it will inevitably lead to environmental and economic collapse, but not prosperity.
Based on this context, we can further think that if resources are only used in the form of copying the old model, redistributing, and plundering and squeezing, it is a zero-sum game, and the world will not get better, but will get worse. When we use technology (or any new solution) to solve a problem that hasn't been solved before, or hasn't been solved well enough, we create new value. For example, machines and computers themselves have no demand, and all the value generated will eventually return to humans. It's just that the vast majority of the value of these repatriations goes back to the individuals and companies that created the technology (or any new solution).
The best competition is no competition
For start-ups, the author's advice is:Build a creative and exclusive businessAnd avoid competition. Because monopolies have no competitors, they can set their own prices and decide on production and products while maximizing profits**.
And the opposite of monopoly enterprises is perfect competition , when the producer's ** fully meets the needs of consumers. At this time, the pricing can only be determined by the market, and in the long run, the company in a state of perfect competition will not get economic profits.
Interestingly, monopolies often lie in order to protect themselves. They know that monopolies invite scrutiny, regulation and criticism. For example, Google's search engine market accounted for nearly 70% in 2014, while Microsoft's second-place search engine market accounted for only 19%. Google would describe its business this way when it faced regulators: it has only 3 market share in the advertising market4%, accounting for less than 0 in the market for consumer electronics24%。Google portrays itself as a tech company that hides unwanted attention. In order to maintain a monopoly on profit, they often exaggerate (non-existent) competition and try to disguise their monopoly position.
Let's take another example of the opposite. Imagine that you open a restaurant in City A that specializes in Korean food, and you may feel that no one else does it, and the market is completely yours. But this ** is only right if it is limited to the Korean food market. What if the real market is the food and beverage market of the entire city A?What if all the restaurants in the nearby towns were also part of the market?Companies in a state of perfect competition sometimes overestimate their uniqueness in the market.
The biggest inspiration from this point of view is that in the business world, the best competition is often no competition, which is the so-called blue ocean market. Many exclusive businesses will falsely claim that they don't have an exclusive marketplace (like Google, mentioned above).On the contrary, non-monopoly companies are everywhere claiming to dominate one side (such as the above-mentioned restaurant in country A). Competition, while contributing to the progress of the overall market, is not conducive to the profitability of individuals or companies. If an industry is in a state of high competition, even if one of the companies goes out of business, it will have little impact on the world;Other similar contenders are always ready to take its place.
For our personal career development, when we focus on competing with others, we will imitate and copy others, and want to do exactly the same thing as others. A more advantageous career strategy is that we use our authentic selves to solve a unique problem and make a product or service that we must have. It's not that we're afraid to compete with others, it's that we live in a state where others can't compete with us. At this time, we will have the most exclusive workplace advantages and the highest degree of workplace freedom.
Success is not a ticket
The most hotly debated question in the business world is whether success is due to luck or ability
The book criticizes a number of descriptions of the "theory of luck", some of which are based on the fallacy of attribution, and some of which are due to the humility of the entrepreneur himself. The author does not deny the influence of luck, but he rejects the argument that the element of luck is taken too seriously. He discovered a wonderful phenomenon in the world of entrepreneurship:Companies with long-term plans are always undervalued
In 2004, when Facebook founder Mark Zuckerberg was still a student at Harvard University, he secured the author's first external funding to start his business. After careful evaluation, the author lent a total of $500,000 to Zuckerber, acquired nearly 10% of the shares, and became one of Facebook's earliest directors.
In the book, the author mentions that when Yahoo proposed to buy Facebook for $1 billion in 2006, he thought the directors would at least consider it. Unexpectedly, as soon as Zuckerber walked into the boardroom, he said, "Okay, guys, this meeting is just a formality, it shouldn't take more than 10 minutes, and we certainly won't be right now." Zuckerber knew that he was going to take the company to **, and Yahoo didn't know. Zucker has a plan in mind, and Yahoo doesn't have (or a bad plan).
As a result, the authors throw out a profound business insight: In a world where the future is thought to be random fluctuations, companies with certain plans will always be underestimated. This insight gave me a similar realization: certaintyThe individual who plans will always be underestimated。And how does that help ourselves?
If we feel that we have sufficient planning and execution, but our current value is underestimated by others, then this is an inevitable phenomenon, and we must not feel discouraged about ourselves. Because this is the inevitable encounter of a person with potential. It reminds me of the last three years when I would always hear friends and family question and underestimate what I was going to do, and they would say, "Fewer and fewer people are reading." They see the superficial phenomena of the reading world, while I see the plans and visions based on the underlying needs behind the books.
My own inspiration is that if people keep overestimating you and think you're about to have the luckiest thing in the world, there's a high chance you're starting to go downhill. If you feel like you've been underestimated, it's a wonderful thing because there's a high chance that you're going to start going uphill. Knowing how to enjoy being underestimated, you will stand at a different starting line than others.
Finally, this passage from the book is worth keeping in mind: A start-up is an opportunity for you to be sure that you will be able to do your best. Not only does it give you a place to belong in your life, but it also influences an important corner of the world. It all starts with refusing to let unfair odds reign. You are not a ticket whose fate is determined by chance. 」
It is better to be an underestimated plan executor than an overrated, lucky-buying person.
The world of power laws.
The author mentions that while most companies don't need to deal with venture capital, everyone should be aware of what these venture capital firms are trying to understandWe don't live in the normal world, but under the law of power
The power law refers to patterns of severe inequality of distribution, which can be seen everywhere in nature and society. Another common term is the 80 20 rule, which is like 80% of the land is in the hands of 20%. The same is true for a successful venture capital**, where most of the companies they invest in will fail, and only a handful will succeed. However, when these very few companies succeed, they often bring more rewards than all failed investments combined.
Interestingly, when venture capitalists choose investment companies, it is not a financial problem of diversified hedging strategies, and they cannot be thought of with a normal distribution mentality. They can't use ** to invest in a bunch of ordinary companies in order to diversify their investments. Every company in their portfolio must have the potential to succeed in a large-scale market. They only focus on a small number of businesses that have unique fundamentals and have the opportunity to thrive into billions of dollars.
It's the same for us personally. If we think of our professional skill set as an investment, we have to think in terms of the law of power. We can't think of professional competence as diversification, as if the more majors we study, the better, and then expect that one of them will bring a return in the future. As the author says: What you do is important, you should focus on what you are good at, and before that, you should also think about whether what you are good at has a future prospect. A promising thing is worth redoubling your efforts to do. On the other hand, if you focus on a lot of things that you are not sure about whether there is a future, you are likely to end up with nothing.
The rewards of the few most promising things will in the long run far outweigh the slow accumulation of other mundane things.
About the company's operating foundation
The author lays out some of his practical observations about the operating basis of a start-up.
The first is the salary of the executive. For example, after investing in hundreds of start-ups, he noticed one thing:The less money a company pays to its CEO, the better the company performs。If an executive of a company earns more than $300,000 a year, he may be more of a politician than an entrepreneur. Because a high salary can make people inclined to maintain the status quo and defend the current salary, rather than working with others to identify problems and actively solve them. Conversely, cash-starved executives focus on increasing the overall value of the company.
Then there is the salary of the employee. The author believesAny salary paid in cash is more like looking at the present and less about the future。And high cash is equivalent to allowing employees to take the company's value now, rather than allowing employees to invest their time and energy to create new value for the company's future. On the contrary, people who prefer to take the company's ** as a salary will reveal that they attach more importance to the long-term development of the company and are willing to make efforts to enhance the future value of the company. Remuneration is what makes employees give their all.
Regarding the company's salary, I used to think that receiving cash salary is the most practical, after all, you can get it, and then invest in your own company or other companies, which is a more flexible application. However, from the perspective of a start-up operator, if the reward is used as an incentive, it is more likely that the employee's focus will be on the future value-added, rather than just the current cash value. As long as we add the dimension of time to many things, it will change the way we look at things.
Finally, there is a discussion about innovation. The author believesAs long as a company is still creating new things, the entrepreneurship is not over, and once it is no longer creating new things, the entrepreneurship is over。It's important for the company to continue to create new things in the future, not just inherit the old achievements of the past. If a company does it right, it can even extend the startup indefinitely. This concept is very similar to the Day 1 concept proposed by Amazon founder Jeff Bezos, which treats every day as if it were the first day of entrepreneurship.
Questions that must be answered by successful companies
At the end of the book, the author uses the bubble in the clean energy industry as an example of what a successful company must faceSeven questionsand give a good answer. The book mentions that the vast majority of clean energy companies ignore these seven key issues at the beginning of their business, leading to a certain failure. Let's take a look at what each of these seven questions are.
Engineering Question: Are you creating a breakthrough technology, or is it a method of slight improvement?
Timing Question: Is Now the Right Time to Start This Business?
Monopoly Question: Do you want to grab a high market share in a small market from the beginning?
People Questions: Do You Have the Right Team?
Sales Question: Do you have a sales plan in addition to the ability to develop a product?
The enduring question: Can your market positioning last for 10 or 20 years?
Secret question: Have you found a unique business opportunity that no one else sees?
In the case of the solar industry, why do most companies fail?In terms of engineering problems, they are delving into technologies to improve 10 to 20% conversion efficiency, too little;In order to be able to monopolize the market, it is necessary to have patented technology that is 10 times better than its competitors. In terms of exclusivity, many companies will boast that they have a high rate of solar panel installations in such and such a region, but what about putting the market in the world?What about putting the market on the entire clean energy industry?The book analyzes in detail many of the details that solar energy cannot answer these seven questions, and uses Tesla's electric car as a success story to the contrary.
The inspiration for me in this chapter is that for us personally, the field of expertise we choose to devote ourselves to, or the career we want to build, must also stand the test of these seven questions. As the author says: If you don't have a good answer, you must always feel bad luck and fail in your career. If all seven of these points are not problematic, you can master the luck and achieve success. This also echoes the notion in the previous paragraph that success is not a lottery.
Regarding the previous paragraph, mentionedThere are prospectsThree words, it sounds beautiful, but what does it mean exactly?How do we assess it?The above seven questions will come in handy. If the thing we choose to invest in answers the above questions, there is a high probability that it will be a promising thing. This is also one of the benefits of reading a business book, which can transform the ethereal-sounding slogan (or chicken soup) into a problem and process that you can actually operate.
Endless secrets to discover
After finishing the reading notes of "From 0 to 1" this time, it is equivalent to the third time I have read this book. While some companies' data is outdated, many of the ideas in the book are still as common today. The author also constantly reminds us to try to look at the world differently in order to discover the mystery behind it.
Something like this: The decisions you are told are usually not the right ones, because the most important things are rarely obvious or even secret. If we only look at the world with a Xi attitude, we only see the world as others see it. Then there is no way to create any commercial value from such a perspective.