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[Book review] Zero to One: If you believe that life depends on luck, why are you reading this book?




Maybe, because I've not been getting enough sleep, or perhaps it's because I have been teaching subjects to fit everyone, including risk-averse students, I've been feeling a little less enthusiastic about taking charge of my future.


"Zero to One" is an excellent book to read at such times. It's written by Peter Thiel, the man who started PayPal and later ran one of the most influential venture capital firms in Silicon Valley. I've read it many times in the past. The book is about the vision for an uncertain future. At the other end of the spectrum is "Lean Startup", a book about creating new products by asking the market what the correct answer is and making the smallest and most detailed updates possible because the world is too uncertain to understand.



First of all, Zero to One is the act of using technology to create something that did not exist before. Because it doesn't exist, there is no market and no competition. And the power that you put into those markets and competitors is better put into creating new technology. In a world where there is no competition, you have monopolies that can set their prices. Monopolies are very profitable so that they can think about things other than money, and they can run their companies with a long-term view of the future. In other words, they can have a vision. And after all, this is how the investment world works. The reason why Tesla, which produces only a tenth of what Toyota does, has a higher enterprise value than Toyota is not just because everyone likes Elon Musk. It's because current enterprise value is synonymous with the total future cash flow of a company. Toyota generates a lot of cash flow now, but will it do as well in a world where electric cars are replacing them? Many people believe that Tesla will be able to sell more vehicles in the future, so the company's value is so high today.


The other innovation, the act of making billions out of one, is globalisation, which develops through competition. There is no time to think about the future, 10 years or 100 years from now, because they have to worry about what other companies are doing tomorrow or the day after. It is difficult for a company like this to have a vision.


A brand is something that oozes from the essence of what a company has done, and if you create a brand that looks good, it will not be supported. Similarly, it's hard to ask a company to have a vision when the competition focuses on next month's sales performance. If you have an overwhelming monopoly, are you more profitable, do you think less about money, and do you have a vision? This question is "the egg and the chicken", and you have to understand which comes first.


It's the opposite of what I said above: if you don't have a vision first, you can't build a company that will have monopoly power. If you do, you will be more profitable, a virtuous circle will begin, and you will be able to baptise your company's vision.


In the middle of the book, Peter Thiel asks the reader this question.


'If you believe that life depends on luck, why are you reading this book?'

I think I've been a bit too much in tune with my surroundings lately.


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