An Introduction
The famous book written by PayPal co-founder and billionaire entrepreneur Peter Thiel in 2014, Zero to One, encompasses various anecdotes and opinions from his interesting experiences as a startup founder. This is a commentary limited to chapters 11 to 14 with the addition of the conclusion, since the book has numerous topics throughout the book despite being a relatively easy read. As a disclaimer, this is not a review of Zero to One itself, but my personal take on some of the topics that Thiel introduces. As I conclude this commentary, I personally thank all of the readers who made it this far, and suggest to buy this book if you haven't already. Don't worry, it's worth it!
Zero to One, Chapters: 11 to 12
In Chapter 11, “If you Build It, Will they Come?”, Thiel points to a simple mistake that even professionals make: “The Field of Dreams concept is especially popular in Silicon Valley, where engineers are biased toward building cool stuff rather than selling it. But customers will not come just because you build it. You have to make that happen, and it’s harder than it looks.”
One cannot just create a business, gather teammates, and put all of their heads together into making the best product without thinking about your potential customers: “how do we sell this?”. For engineers and programmers, “nerds” who are used to creating value that is seen and “transparent”, sales can be seen as a static field without any real merit. But as Thiel makes clear: advertising, marketing, and sales matter regardless of whether tech nerds might disagree. In particular, the field of advertising holds a special importance in gathering your customer base. A concise way to describe advertising is sneaky but effective; of the machinations of advertising, as he notes: "It’s easy to resist the most obvious sales pitches, so we entertain a false confidence in our own independence of mind. But advertising doesn’t exist to make you buy a product right away; it exists to embed subtle impressions that will drive sales later." For the modern person, TV is not where advertisers do their work: one is influenced without even recognizing it. You can see it on social media sites where corporate influencers create trends, on the popular branded T-shirts and clothing that college students wear, on billboards and posters in sports events, and much more. But advertising is just half (or a third) of the uphill battle for making your customer base buy your product— you also need salesmen to make it happen.
In the next section, “Nerds vs. Salesmen”, sales is introduced as the polar opposite of the practical applications of fields like engineering. For those engineers and programmers who are used to creating value that is seen and “transparent”, sales can be seen as just delivering the product. However, the truth is that sales, like Thiel says, is "an orchestrated campaign to change surface appearances without changing the underlying reality". In other words, they are making it appealing to the customer on the receiving end of the sale. In terms of presence, Thiel says that the majority of sales is barely seen in the open (like widely televised “door to door” salesmen), since they actually operate behind the scenes.
In the section "Sales Works Best when Hidden", Thiel details that due to the effectiveness of “hidden sales”, it is not reflected in job titles: “Advertising salesmen = account executives, Customer salesmen = business development, Business salesmen = investment bankers, Personal salesmen = politicians”. As he remarks, all of these different titles in different professions are the hidden salesmen that influence people to buy their product behind the scenes.
To drive the point that hidden sales work, Thiel summarizes his point in the following section, "The most fundamental reason that even business people underestimate the importance of sales is the systematic effort to hide it at every level of every field in a world secretly driven by it." Distribution is essential to the design of the product, one has to invent an effective way to sell it or the business is bad. As Thiel notes, "path dependence" is the term that economists would attribute to this fact.
The “monopoly” salesman Thiel also has a few words to say on sales’ efficacy in producing monopolies: "Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true." Sales is the way to distribute your products, and every successful business strategy focuses on the customers first, then products second.
The two effective metrics for determining distribution, or in layman's terms, the two definite ways that entrepreneurs make judgements on how to sell a product are as follows: "(Customer Lifetime Value, or CLV) must exceed the amount you spend on average to acquire a new customer (Customer Acquisition Cost, or CAC).” In addition to these metrics, Thiel mentions that one should use the sale price of their flagship product in order to gauge how much to spend to sell it: “In general, the higher the price of your product, the more you have to spend to make a sale—and the more it makes sense to spend it. "
For the first category of sales, Thiel introduces "complex sales", or sales of $1 million of worth or more: "only way to sell the most valuable products". In complex sales, a company undergoes a process of negotiation where the highest executives of the board of directors become the personal salesmen of their product. The examples given of complex sales include the companies SpaceX and Palantir, which sell their product to the government.
Once you have reference customers, you can start growing as a company. Reference customers are those that best represent your ideal customer in a reproducible way, so that you can keep building your model around them to create more. This is why Thiel emphasizes building from the bottom up for “complex sales”. In a tandem arrangement, he reminds the reader of the importance of trust: "Good enterprise sales strategy starts small, as it must: a new customer might agree to become your biggest customer, but they’ll rarely be comfortable signing a deal completely out of scale with what you’ve sold before." You will need to build trustworthy relationships in order to make the biggest of sales.
In the second category lies personal sales between $1,000 and $10,000. As a model personal sales company, the cloud content management and file-sharing internet startup Box exemplifies the approach. Their lucky break in the technology market came because of their third salesperson, Blake, who utilized a more personal approach:
“Starting with small groups of users who had the most acute file sharing problems, Box’s sales reps built relationships with more and more users in each client company. In 2009, Blake sold a small Box account to the Stanford Sleep Clinic, where researchers needed an easy, secure way to store experimental data logs. Today the university offers a Stanford-branded Box account to every one of its students and faculty members, and Stanford Hospital runs on Box.”
Without this personal approach, their current success would not be possible; for this level of sales, one needs to skip the theatrics of using marketing and advertising and avoid using non-salesmen like CEO’s to sell the product— they simply need to meet and build relationships with people who need the product. That’s the essence of personal sales, and the successful strategy for small product level companies.
These customized strategies are the best way to leverage the unique build of one’s company; they use a unique “level-based” strategy in addition to the metrics of distribution. But in contrast to complex sales and personal sales strategy, companies with deal sizes of $10,000 to $100,000 for their products should not involve CEOs or regular salespeople. Thiel notes that even having either is a big mismatch for that level of business. If salespeople are ineffective, what should these middle-level companies use?
In-between personal sales and traditional sales, with the difference of having salespeople to not, Thiel notes that there is a "hidden distribution bottleneck" for products. For products to reach a small-business that the product is targeted to (around $1000s range), one would need a different type of distribution because the rest are inefficient. Thus marketing and advertising are the aces of the middle-level product company’s strategy.
Another useful method for small to middle-level company strategy is viral growth— viral growth is fast and cheap. In order to maximize the potential of viral growth, the ideal viral loop should be as quick and frictionless as possible, like how Youtube provides a platform with short entertaining videos, or something that grows naturally, like social networks and online payment wallets that have a rapidly and continuously growing customer base. As a viral product, Paypal was the last mover and was successful because of it. The PowerSellers on eBay adopted the platform as it became the sole payment platform for eBay, and the rest is history — viral history.
All of these strategies are well and good in theory, but in practice, this gets the business to a level playing field with the leaders of their field. Next comes the phase where companies have to distinguish themselves by making their theory translate into real sales, or die trying: “Most businesses get zero distribution channels to work: poor sales rather than bad product is the most common cause of failure. If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.”
Like in the previous topics of the book, he includes this as an example of the ever-present power law:
“The power law also applies to the success of distribution: Most businesses get zero distribution channels to work: poor sales rather than a bad product is the most common cause of failure. If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished."
As Thiel makes apparent, the 80-20 distribution of corporate success is determined by only one factor: product sales. So one has to not only use the effective sales strategy for their company but improve it so that it rises above the competition, proving itself through sales.
In “Selling to Non-Customers”, Thiel adds consideration for companies that they should also think of sales outside of products— think of your company as a product to your potential team and sell it to them. "Just as you can never expect people to buy a superior product merely on its obvious merits without any distribution strategy, you should never assume that people will admire your company without a public relations strategy." The public relations strategy is the sale of the company itself, and it is just as necessary a step in making your company successful. The final note Thiel writes on sales, is that every single company has a salesperson, which can be less than obvious because of its “hidden” nature. "Look around. If you don’t see any salespeople, you’re the salesperson."
Zero to One, Chapters 12 to 14 (+ Conclusion):
At the outset of chapter 12, “Man and Machine”, Thiel argues against the mistaken belief that computers will replace humans. On the premise that information technology continues growing at a rapid rate, he believes that it will actually complement humans to further our industries: “The premise of ‘better computers will necessarily replace workers.’ is wrong: computers are complements for humans, not substitutes. The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete." Thiel makes note of computers as the foremost evolving technology: chess champions losing to engines, the Jeopardy champion outclassed by AI, and the Guardian’s report on self-driving cars that could “drive the next wave of unemployment” for cab drivers. However, Thiel argues that humans and modern computers have different capabilities which are uniquely different: we have our five senses, and computers have data processing— “When a cheap laptop beats the smartest mathematicians at some tasks but even a supercomputer with 16,000 CPUs can’t beat a child at others, you can tell that humans and computers are not just more or less powerful than each other—they’re categorically different.” I fail to agree with this lax perspective, and after the next section, I’ll explain why.
In the next section “Substitution vs. Complimentarity” and the subsection “Globalization Means Substitution”, Thiel recounts the alarmist nature of America 15 years ago, who decried globalism and echoed Ross Perot vocalized fears of foreign workers taking jobs, but he adds that they weren’t necessarily wrong: "Gains from [free] trade are greatest when there’s a big discrepancy in comparative advantage, but the global supply of workers willing to do repetitive tasks for an extremely small wage is extremely large."
The gap in comparative advantage is further mentioned in “Globalization means Substitution”, where Thiel compares how western and eastern cultures have the same wants: from motorcycles to cheap toys and textiles, "the convergence of desire remains the same". Succinctly summarized: “From Petersburg to Pyongyang, all oligarchs have the same taste in Cristal". What this means is that other countries will compete for the same desires, and there won't be enough resources to satisfy these additional wants.
In the face of rapid globalization, Thiel builds on the point that more technology means less substitution and competition that people face: "When we design new computer technology to help solve problems, we get all the efficiency gains of a hyper-specialized trading partner without having to compete with it for resources."
I would heavily agree that globalization in our modern world is a massive challenge for domestic corporations due to the equally massive global population of people which rose to 7.8 billion over 2020. Similar to globalization, people also lump in digitalization as a similar existential threat to their jobs, but Thiel believes it's not the same level of threat. Computers already dominate many industries, yet to him they are still incomplete and cannot replace people because, for one, digitalization means better technology, not another competitor: "people compete for jobs and for resources; computers compete for neither."
To prove how computers work best together with humans, Thiel recounts how in mid-2000, PayPal was losing $10 million per month in credit card fraud. In this drastic situation, Thiel and his partners turned it around with "Igor", a hybrid program that flagged suspicious credit activity to humans who shut them down. The simple combination of man and machine turned their high losses around into profits.
The newly built Palantir was based on this fraud-detecting technology, "Igor", that employs machines and humans together to deal with evolving fraud, terrorism, illegal activities, and security risks. The FBI was a big client for Palantir, along with other high-profile government organizations.
Thiel compares the technology of “Igor” to how professionals complete their jobs by performing their disciplines routinely “like computers do”, while altering their methods and procedures according to the person they're helping in a “human” way.
Giving an example with a company Thiel worked with extensively, LinkedIn, further documents the beneficial and disjointed connection between man and machine:" Recruiting is part detective work and part sales: you have to scrutinize applicants’ history, assess their motives and compatibility, and persuade the most promising ones to join you. Effectively replacing all those functions with a computer would be impossible. Instead, LinkedIn set out to transform how recruiters did their jobs."
LinkedIn is a model company for the complementary technology theorem. According to Thiel, this complementary nature is key for creating valuable companies:
"We have let ourselves become enchanted by big data only because we exoticize technology. We’re impressed with small feats accomplished by computers alone, but we ignore big achievements from complementarity because the human contribution makes them less uncanny."
Now, I withheld my counter earlier in order to give readers a complete view of the author’s viewpoint, but here I will make the point that the evolution of computing is not going to stop at simply being “different” to us.
People are right to fear digitalization as much, if not more than globalization because digitalization is exponential while globalization is not. In the short term, humans will continue to develop computers until the point where they are self-maintaining, and at that point, they are predicted to exponentially grow from the meager “data-processing” capabilities of today to eventually overtake humans completely. From Thiel’s perspective, his needs for Palantir were solved by a combination of humans and machines because they are the most efficient solution in the long run. But I say his needs were satisfied by “Igor” only because computers alone lack what we have— but that won’t last forever. His man-machine solution was a small, early, low-producing outlier on the graph of future computer development. The age where we can put aside digitalization as “alarmist” will disappear as fast as it came— computers will clearly be an invincible competitor within this century.
Of futurists who hope for machines to replace us, to Luddites who desire a halt to technology if it means preventing our replacement, Thiel argues that one should avoid letting these extreme indefinite fears about the far future "stop us from making definite plans today":
“The logical endpoint to this substitutionist thinking is called “strong AI”: computers that eclipse humans on every important dimension. Of course, the Luddites are terrified by the possibility. It even makes the futurists a little uneasy; it’s not clear whether strong AI would save humanity or doom it. Technology is supposed to increase our mastery over nature and reduce the role of chance in our lives; building smarter-than-human computers could actually bring chance back with a vengeance. Strong AI is like a cosmic lottery ticket: if we win, we get utopia; if we lose, Skynet substitutes us out of existence. But even if strong AI is a real possibility rather than an imponderable mystery, it won’t happen anytime soon: replacement by computers is a worry for the 22nd century. “
With Thiel’s perspective, we are armed to say that computers are complements in the short-run, but the thing is: how far away is a “computer substitute” really? There is a major problem with making sides to represent the existing theories of “strong AI”, the evolution of our computing technology of today, and then hastily pushing the problem into the future.
Ironically, in using data and artificial intelligence to look at itself and its own exponential nature, data scientists can draw some very accurate speculations on digitalization from the computing innovations of the first two decades into this century alone. It is as Lord Byron, one of the greatest English poets once wrote, “The best prophet of the future is the past.”
Here is the story that the development of data tells: our current industries each have their own vertical of information technology, and each industry’s growing computing technology has the potential to reach the “breaking-point” where self-sustaining technology begins to exponentially grow in capability. Add this fact to the corporate ideal of hands-off profit, derived from the human want to maximize gain with less effort, and one can see digitalization as an arms race for companies in the 21st century. In this case, one needs to treat “strong AI” as an inevitability and plan accordingly— because with a growing number of innovators in this century who won’t be satisfied with man-machine solutions like “Igor”, the future will become the present much sooner than Thiel thinks.
In Chapter 13, “Seeing Green”, Thiel segues back into a company focus and provides an instructive example of what not to do from the failure of the cleantech industry— from the bubble to the crash. As a result of the issues of global warming and pollution reaching a warning point at the beginning of the 21st century, Thiel says "entrepreneurs started thousands of cleantech companies, and investors poured more than $50 billion into them. So began the quest to cleanse the world. It didn’t work. Instead of a healthier planet, we got a massive cleantech bubble."
To correct these mistakes in the future and provide a benchmark for good business, he makes a list of 7 questions (discussed previously in the book) that all businesses have to answer. Thiel notes that the cleantech companies must have failed in at least one or more aspects of them for them to fall so hard even though there "were (and still are) good reasons for making green energy a priority."
Most cleantech companies crashed because they neglected one or more of the seven questions that every business must answer:
“1. The Engineering Question: Can you create breakthrough technology instead of incremental improvements?
2. The Timing Question: Is now the right time to start your particular business?
3. The Monopoly Question: Are you starting with a big share of a small market?
4. The People Question: Do you have the right team?
5. The Distribution Question: Do you have a way to not just create but deliver your product?
6. The Durability Question: Will your market position be defensible 10 and 20 years into the future?
7. The Secret Question: Have you identified a unique opportunity that others don’t see?"
Unfortunately for our environment and the global market of cleantech, the companies that were started in this field failed in each and every one of the aspects in distinct ways, says Thiel.
For instructive purposes, he describes each mistake in detail with examples, but I will summarize how and why they didn’t meet the criteria that he credits as a necessity for successful industries:
The Engineering Question: There were too few real improvements in technologies like solar cells and other alternative energy sources.
The Timing Question: Cleantech was sluggish— there was no real plan to take over the slow-moving industry of cleantech with fast developments. The proprietary technology of cleantech companies lagged behind the grandiose “clean earth” hype of their investors and customers.
The Monopoly Question: Of the majority of cleantech companies, besides those that outlasted the bubble (e.g. Tesla), there was no monopolization of unique solutions. Because of this, they tried and failed to make their company model persuasive: each of the cleantech companies exaggerated its uniqueness in some way and believed that it would win over clients and the public interest.
The People Question: There were not enough innovative people in cleantech. There were more dressed up salesman executives than people good at technology, and from Thiel’s position, he would "pass on any company whose founders dressed up for pitch meetings".
The Distribution Question: Cleantech companies, like "Better Place", forgot about customers and thought that their technology spoke for itself.
The Durability Question: A combination of mistakes in planning led to the fragility of the cleantech industry. From the beginning, without innovation and reliable growth, they were only as durable as their competitors weren’t. This lack of durability culminated in the "blame China" chorus of 2012, where the major solar panel manufacturer and developers protested and sought legal action about China's monopolization of solar panel business and driving down prices. The real problem was that they didn't plan for globalization to destroy their competitive edge. In addition, cleantech didn’t meet the needs of our growing industry in time, and was replaced with less clean energy sources. Fracking rose by 3% five years after 2000, and cleantech didn't take it seriously enough to ramp up production or development. Fossil fuels subsequently got cheaper and cleaner in the future driving cleantech out of the competition.
The Secrets Question: Cleantech based their business models on broad conventions (the conventional truths of needing a cleaner world), and lacked any secrets. Thiel's contextual description of secrets, "specific reasons for success that other people don’t see," simply didn’t apply to their general model of armchair climate activism, haughty disregard of the necessity of sales, and failure to recognize their need for competitive action.
Within the next section, “The Myth of Social Entrepreneurship”, Thiel defines "social entrepreneurship" with this wave of unsuccessful cleantech companies that resulted in "hundreds of undifferentiated products all in the name of one overbroad goal." Taking their mistakes into consideration, he makes an example of them to prevent others from making their mistakes; instead, they should ensure their company is customer first before it is socially beneficial. In conclusion, don’t do the same things as everyone else, because as Thiel explains, "doing something different is what’s truly good for society—and it’s also what allows a business to profit by monopolizing a new market."
Without a successful counterpoint, one cannot truly see where they went wrong: was the whole cleantech industry incompetent in the global energy market because it is impossible for “social entrepreneurship”? Or was it because they went terribly wrong on their business side? Luckily for Thiel, his old colleague Elon Musk’s successful electric car company, Tesla, provides him an easy answer and a perfect example of what to do for the cleantech industry.
In the section “Tesla: 7 for 7”, Thiel notes the important exception to the rule which the example of Tesla provides: "Tesla is one of the few cleantech companies started last decade to be thriving today. They rode the social buzz of cleantech better than anyone, but they got the seven questions right, so their success is instructive.” To instruct others on Tesla’s enlightened actions, Thiel checkmarks the seven questions again in order to benchmark the successful electric-car company. Here’s a quick summary of how they got it right:
The Engineering Question: Tesla’s technology is the best in the industry and other companies rely on their parts.
The Timing Question: their timing was impeccable: they secured a government loan right before cleantech subsidies ended.
The Monopoly Question: Tesla grew into a monopoly because it started small (with expensive electric cars) and took the R&D time to make their model mass-producible and cheaper in their Model S and other cars.
The Distribution Question: Tesla took distribution seriously and owns the entire chain: selling vehicles in their own stores; this helped build their customer experience and brand.
The Durability Question: Tesla took its chances early and their continued innovation seriously, which made their own business model massively successful, and successful marketing meant that its brand was coveted by many car-owners. Since the innovator, Elon Musk still has the reigns of the company, the durability is quite high indeed.
The Secrets Question: The secret that Tesla used to rise to the top is that people liked cleantech for fashion and trendiness more than its environmental imperative. While movie stars and celebrities wanted to look “green” during the cleantech revolution, Tesla provided cool and environmentally clean cars that more than suited them. This went on and on down the social ladder until Tesla was ubiquitously associated with a powerful brand image along with a real usefulness factor.
In his final section of chapter 13, “Energy 2.0”, Thiel juxtaposes the ideas of 90's entrepreneurs to the ones of cleantech:
"The 1990s had one big idea: the internet is going to be big. But too many internet companies had exactly that same idea and no others. An entrepreneur can’t benefit from macro-scale insight unless his own plans begin at the micro-scale. Cleantech companies faced the same problem that applies no matter how much the world needs energy— only a firm that offers a superior solution for a specific energy problem, like any other industry’s solutions, can make money."
Thiel doesn’t just want to discourage entrepreneurs from venturing into the clean industry, however. The main evidence of his encouragement is these statements:"The macro need for energy solutions is still real. But a valuable business must start by finding a niche and dominating a small market," and, "Paradoxically, the challenge for the entrepreneurs who will create Energy 2.0 is to think small." He connects these two claims order to encourage a framework for the next cleantech revolution which answers all of the 7 elements and makes a case for active, competitive clean energy.
Moving along to a new frontier— what is it that makes founders notorious, like Mark Zuckerberg of Facebook; what is it that makes them popular, like Elon Musk of SpaceX and Tesla? In the 14th chapter, “The Founder’s Paradox”, Thiel explains why the public views founders the particular way they do.
To begin with, one has to look at their own experiences in order to relate with their perspectives. Thiel's "PayPal Mafia", or the founding members of Paypal, had a great interpersonal friendship that went beyond their cofounding partnership. He describes his team's unique characteristics: most were 23 or younger, ambitious, diverse, and composed of "weird kids"; in other words, they were motivated people who came from completely different countries with similar ages and similar "weirdness".
Likely, from his beliefs of having more human-oriented relationships in startups, he was able to form a team of people who were like-minded even from such different backgrounds. It’s not just his idea, though, because that model of team-building was objectively beneficial to his company. Unique founders like PayPals’ are the main theme of this chapter, or as Thiel puts it, "This chapter is about why it’s more powerful but at the same time more dangerous for a company to be led by a distinctive individual instead of an interchangeable manager.'"
In the next section, a bell curve is shown entitled “The Normal Distribution” of traits, with weak personalities on one side, strong ones on the other, and in-between lies the average person. Thiel makes another bell-curve entitled “Fat-Tailed Distribution” with more extreme personalities and less average ones, to show what founders’ personalities look like. Many founders have "extreme traits", but they can be exaggerated by themselves or others, nature or nurture, or all of the above symbiotically reacting in pushing their image to the extreme. "The cycle usually starts with unusual people and ends with them acting and seeming even more unusual". He encaptures this in a cycle: founders are actually different -> develop extreme traits -> they exaggerate their traits -> others exaggerate their traits -> … and on and on until their traits are thoroughly seen as “weird”.
In the next section, “Where Kings Come From”, Thiel compares the way extreme founder figures are now popularized like "scapegoats" were in archaic cultures:
"The famous and infamous have always served as vessels for public sentiment: they’re praised amid prosperity and blamed for misfortune".
People look at those who are very different from them like "scapegoats", and Thiel explains what it means for founders in our society:
“Like founders, scapegoats are extreme and contradictory figures. On the one hand, a scapegoat is necessarily weak; he is powerless to stop his own victimization. On the other hand, as the one who can defuse conflict by taking the blame, he is the most powerful member of the community".
This balance of being a “scapegoat” and having power is the conundrum of popularity in a nutshell: the troubles don't end once you get to the point of being known for your success, but you are judged proportionally harder as well. As Uncle Ben tells Peter Parker in Spiderman, “with great power, comes great responsibility,” and he is not kidding.
According to Thiel, the scapegoats in society include some of the technology founders we respect and hate: "We alternately worship and despise technology founders just as we do celebrities." In view of that point, he compares the pressures that people place on startup founders to those celebrities like actors and musicians who people force into an image of "American royalty". In the end, many of those celebrities, like Elvis, Michael Jackson, and Britney Spears, had broken down at one point from the various pressures in their life.
The pressure of being in the public limelight brings the risk of becoming a scapegoat— of adulation turning into persecution. Of founders, I would agree with the examples Thiel brings— movie star and airplane designer Howard Hughes and computer mogul Bill Gates were (and in Gates’ case, still are) judged heavily and unfairly. Like other celebrities, people see these tech founders as various extremes from their own projected scapegoats, without viewing them as people from a rational lens. Founders may seem very different, but in the end, those assumptions are literally just that; even with their eccentricities, they are still people that should be viewed humanely rather than as characters in a book.
Additionally, we should also look at founders from a company lens: what merit do they bring to the company. These same critically-viewed “extreme founders” are the only way to make a company successful, and the likelihood is, their bureaucratic and unambitious counterparts cannot bring the same results in a company. Thiel exemplifies Apple's founder Steve Job's eccentric rise, hasty firing, and their scramble to rehire him once they began to fall apart. Apple may have been trying to manage its image and didn’t like Jobs’ eccentricity, but in reality, Apple couldn't do any good business without its founder and had to rely on him once again. They viewed him as a scapegoat and brought him down because they believed he couldn’t see eye-to-eye with their decisions, leading them to mischaracterize him; only without Jobs’ leadership could they finally see the error of their ways.
He caps the sentiment of having a forward-thinking business perspective with a positive case for eccentric founders:
” A unique founder can make authoritative decisions, inspire strong personal loyalty, and plan ahead for decades. Paradoxically, impersonal bureaucracies staffed by trained professionals can last longer than any lifetime, but they usually act with short time horizons. The lesson for business is that we need founders. If anything, we should be more tolerant of founders who seem strange or extreme; we need unusual individuals to lead companies beyond mere incrementalism."
While eccentric founders are generally the most productive, this is a viewpoint that Thiel notes many do not share. His vital warning for founders is that while “uniqueness” is good, individual prominence and adulation can never be enjoyed except on the condition that it may be exchanged for individual notoriety and demonization at any moment—so they have to be careful.
However, some founders will mistake eccentricity for self-centeredness, so Thiel accurately points out that the job of a founder is to bring out the best work from everybody at his company.
He points out the fallacy of acting self-important as a startup founder:
"Above all, don’t overestimate your own power as an individual. Founders are important not because they are the only ones whose work has value, but rather because a great founder can bring out the best work from everybody at his company."
Conversely, not only is that self-centered attitude detrimental to the founders’ own image, but it effectively demotivates others in the company, which makes for poor work and causes a snowballing risk of failure. Therefore, Thiel notes “self-importance” as the most dangerous thing for a founder, along with forgetting the necessity of “secrets”: "The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom."
The conclusion of Zero to One is very short, but it makes connections to the earlier parts of the book in a sensible and cogent summary. Thiel displays four simple graphs representing the four growth options in our future: recurrent collapse, plateau, extinction, or takeoff.
Without a timely and sufficient amount of new technology to relieve competitive pressures, stagnation (a plateau) is likely to erupt into conflict because of the scarcity of resources (recurrent collapse). In case of conflict on a global scale, stagnation can lead to our demise (extinction). Thus our only optimistic option is to grow (takeoff) in which we create new technology to make a much better future.
When we grow, our technology will make exponential progress that will be beyond our current speculations and into the realm of Sci-fi; aptly put: “The result of new technologies is powerful enough to transcend the current limits of our understanding."
Thiel characterizes this future with Ray Kurzweil’s saying, "the Singularity is near", that predicts the exponential growth in many different fields and a future of perfect AI.
The final point Thiel makes is that whatever grandiose thinking drives our predictions of the future, the present is the current issue:
"The essential first step is to think for yourself. Only by seeing our world anew, as fresh and strange as it was to the ancients who saw it first, can we bot-re-create it and preserve it for the future."
Overall, Thiel's perspective is optimistic but it is also realistic. I wholeheartedly agree that in order to meet with a "takeoff" future, we— as the whole of society not just our youngest generation— have to focus on building the next generation of technologies and businesses and creating new things that make the future "not just different, but better".