I recently read Peter Thiel’s book Zero To One. There are some great insights in the book even if a lot of it is theoretical rather than proven. Particularly, I like the way he frames monopolies in a positive light. I believe he is right in saying that if a monopoly ‘behaves well’ they can certainly add more value than many competitive companies can due to continued innovation and long term strategy. I no particular order, some of the particularly interesting ideas were:
- Monopolies are good. Monopolies reward innovation and can create enough capital for long term planning as opposed to incremental strategies.
- If a monopoly creates value, then people will still love that monopoly. Apple and Google are examples.
- Characteristics of a monopoly include, proprietary technology, network effects, economies of scale and branding.
- Software companies are particularly good at economies of scale which allows for very scalable, global reaching companies.
- A power law exists almost anywhere you have to allocate resources. For a startup, a significantly high proportion of income will come from a small proportion of customers.
- A startup doesn’t have a culture, it is a culture. Hire people who breed the mission.
- Everybody sells.
- Successful companies succeed in: engineering, timing, creating a monopoly, building a great team, finding a distribution channel, gaining defensibility and knowing something that no one else knew.
- In order to succeed you have to improve a solution on some level by an order of magnitude.
- Do one thing. Give each staff member just one thing to do. If you give them many things they’ll put off the difficult one indefinitely.