Zeo to One – Part 2

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This week, we focused on the next three chapters of the book “Zero to One”. Here we summarize the key aspects and insights talked in this chapters.

Chapter 4 – The Ideology Of Competition

  • Competition can make people follow opportunities where none exist (Pets.com, PetsStore.com, Petopia.com…).
  • Winning is better than losing, but everybody loses when the war isn’t one worth fighting.
  • If you can’t beat a rival, it may be better to merge (Thiel’s Paypal and Elon Musk’s X.com merged to survive the tech buble in 2000).
  • Only fight when you know you can win, either don’t throw any punches or strike hard and end it quickly.

Chapter 5 – Last Mover Advantage

  • New York Times earned $133 million in 2012.
  • Twitter lost money in 2012.
  • At the time of IPO, twitter was worth $24 billion, more than 12 times the Time’s market capitalization.
  • The value of a business today is the sum of all the money it will make in the future.
  • Most of a tech company’s value will come at least 10 to 15 years in the future.
  • If your primary focus is on the near-term growth you miss the most important question you should be asking: “will this business still be around a decade from now?”.
  • Characteristics of a Monopoly:
    • Proprietary Technology
    • Network Effects
    • Economies of Scale
    • Branding
  • Building a Monopoly:
    • Start small and monopolize
    • Scaling up
    • Don’t disrupt
    • The last will be first

Chapter 6 – You Are Not A Lottery Ticket

  • If success was mostly a matter of luck, serial entrepreneurs wouldn’t exist.
  • Four views on the future:
    • Definite Optimism
    • Definite Pessimism
    • Indefinite Optimism
    • Indefinite Pessimism
  • Indefinite Optimism
    • This view doesn’t work.
    • American households are not saving money.
    • American companies are letting cash pile up because they have no plans.
  • Definite Optimism
    • Works when you build the future you envision.
  • Definite Pessimism
    • Works by building what can be copied without expecting anything new.
  • Indefinite Pessimism
    • Works because it’s self-fullfilling.
    • People expect the worst and receive the worst.
  • Iteration without a bold plan wont take you from 0 to 1.
  • The right mindset for business is Definite Optimism.
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