I recently reread Peter Thiel and Blake Master’s Zero to One. This was my second time reading it: first time from the perspective of a builder, this time with the perspective of a funder. Needless to say, the two roles are intertwined: all but the most passive investors will try to find ways to “add value,” and all builders are inherently investors by making decisions on what to build.
With this different perspective, I took away a lot of new nuggets:
1. Seven Questions Every Business Should Answer:
- 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 starting with a big share from a small market?
- The people question: Do you have the right team?
- The distribution question: Do you have a way to deliver your product?
- The durability question: Will your market position be defensible 10 and 20 years into the future?
- The secret question: Have you identified an unique opportunity that others don’t see?
The best place to look for secrets is where no one else is looking
Two types of secrets: secrets of nature and secrets of people. What secrets is nature not telling you? What secrets are people not telling you?
Example of nutrition where most of the policies were influenced by lobbyist and scientific assessments and discoveries are yet still to be developed.
Tesla knew the secret that people care more about showing off their virtue than actual virtue.
3. The Certainty vs. Outlook Diagram
4. On the audacity of a venture bet
This implies two very strange rules for VCs. First, only invest in companies that have the potential to return the value of the entire fund. This is a scary rule, because it eliminates the vast majority of possible investments. (Even quite successful companies usually succeed on a more humble scale.) This leads to rule number two: because rule number one is so restrictive, there can’t be any other rules.
Consider what happens when you
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