Peter Thiel: A famous Silicon Valley entrepreneur who founded PayPal in 1998 and sold it to eBay in 2002 for $1.5 billion. Later, he focused on financial investment and entrepreneurial investment, and has invested in famous companies such as Facebook.

PayPal: Equivalent to Alipay in the United States, it has cultivated people's payment habits. As long as you have an email, you can pay with US dollars. For detailed stories, please see "Payment War".

Chapter.01

What is the difference between 1 to N and 0 to 1?

Peter Thiel said: The development of human history is divided into two types, one is called horizontal progress and the other is called vertical progress.

What is horizontal progress? The level progress is from 1 to N, just like I opened a store and then copied it to 10, or 100.

What is vertical progress? That is, you did not have a store before, and now you have opened a store. This is a process from scratch. This process is called from 0 to 1, vertical progress.

From 1 to N: Globalization. Now the whole world is imitating the United States, but Americans are particularly afraid that the Chinese will imitate the United States, because there are so many Chinese people. If they imitate the United States and waste resources, then global resources will not be enough.

From 0 to 1: technological development. For example, Edison invented the electric light, the Internet, the Internet of Things, and the 3D printer. These are the processes from 0 to 1, and our lives have changed.

In the traditional era, the business model of successful companies is a process from 1 to N, that is, based on the existing basis, copying previous experience and continuously expanding their market influence through competition. In the Internet era, successful companies are a process of creating a market from scratch, from 0 to 1. To realize this process, competition must be avoided and a monopoly established.

Chapter.02

What are some things that you think differently from others?

Whenever Peter Thiel interviews someone, he will ask the person a question: What are the things that you think differently from others?

He hopes to find people with different opinions from others, because he firmly believes that those who think differently from others may also be right. He hopes to find people with such unique opinions and form a group together. team.

Peter Thiel appeared in 1999. At that time, a phenomenon appeared in the world, which was the Internet bubble. For example, there were many Internet companies in Zhongguancun, and anyone with any idea could make a pot of gold. , the United States is even more crazy. The Nasdaq index has been soaring all the way, soaring to the top and then falling sharply.

A few days after Peter Thiel completed the financing, the Nasdaq index plummeted, the entire Internet bubble burst, and a large number of Internet company investment companies collapsed.

After this incident, people came to four conclusions, which are still considered to be golden rules:

Do business step by step.

Stay lean and flexible and don’t do too much planning in advance.

Compete gradually and don’t rush to create new markets.

Focus on product rather than marketing.

The above four rules are generally believed by people to be And their opposites may make more sense.

Step by step: Bold attempts are better than mediocrity and conservatism. For example, now we all drive, Google researched driverless technology as soon as it came up, and Tesla did not make gasoline-electric hybrids but directly made electric vehicles.

A bad plan is better than no plan: Even if the plan is bad and it will be changed, you should at least have a plan now. Without a plan, you will be running around like a headless fly.

Don’t participate in the competition in the Red Ocean: It’s best not to participate in the competition. You have to find a way to become a monopoly enterprise.

Marketing and products are equally important: no matter how good the product is, it needs to be known to more people through marketing means. For example, when Peter Thiel first started PayPal, as long as you share it with a friend and successfully register, you will get a reward of 10 US dollars. It was this 10 US dollars that allowed PayPal to buy thousands of customers in the early days and have thousands of customers. After that, there were slowly more and more. Peter Thiel spent millions of dollars on this, but without the first few thousand members, they wouldn't even have the initial base, let alone the subsequent geometric base.

Above these four points, Peter Thiel has a wise saying: You must remember that the most anti-mainstream action is not to boycott the trend. If a person resists all day long, you will not resist any trend. Resistance is called immaturity. The most anti-trend action is not to resist the trend, but not to abandon your independent thinking in the trend. When others say such things, you can agree with them or oppose them, but you must think about it yourself, make your own judgment and reasons, and then make a conclusion. This is going against the trend.

Chapter.03

Lies about monopolies:

For example, as a chestnut, it accounts for 68% of the search field, has an annual turnover of 500E, and a net profit of 21 % of Google, he often tells others that I am not a monopoly, and I really don’t make much. I am a technology company like Sony, Siemens, Apple, and I only account for 0.24% of this industry. You should not divide me.

You know, if you are a monopoly in the United States, you will be broken up at the meeting.

In contrast, airlines in the traditional industry can bring in hundreds of billions of revenue a year, but they can only earn 37 cents from each passenger.

Why is this happening? Because airlines are competitive. There are many airlines in the United States. They are a fully competitive market. Under the huge competitive pressure, they cannot make money at all.

Although Google has a monopoly on the search industry, we are unhappy that Google does not make money from us. On the contrary, the two major domestic oil giants, Sinopec and PetroChina, will not drop the international oil price, okay? It's easy for oil prices to fall and taxes to be raised again, which makes us very unhappy.

Why are we not exploited by industries like WeChat and Alipay? We all have WeChat and Alipay on our mobile phones. Their monopoly is even more powerful. Why is this?

Our understanding of monopoly is gradually changing.

Regarding the lies of monopolies, Peter Thiel summed it up this way: In a static society, monopoly is a bad thing. The so-called static society is a society close to a zero-sum game: there are only so many resources in this society, and if you take them away, others will lose them. For example, oil and mineral resources. In this case, you will find that a zero-sum game is very important. What is a dynamic society? The value of a dynamic society is created. When Google, Alipay, Baidu, and WeChat create so much value in the existing society, you will find that not only does he earn his fair share, but others do not suffer as a result. .

Therefore, the current society can be completely transformed into a dynamic social environment. In this dynamic world, creation is the most important thing. Therefore, whether to use resources to achieve a monopoly or to use customers to achieve a monopoly , this is a dividing line.

The core concept from 0 to 1: If we want to be a company, we must be a company that can achieve monopoly. Only if you have the conditions for monopoly can you have enough profit margins and can you guarantee enough R&D and innovation can then bring more competitive advantages.

Chapter.04

Why do people like competition so much?

Peter Thiel analyzed that competition is a concept that we have had since childhood. We have been taught from a young age that we must defeat others in order to achieve success.

The author studied law when he was in college. The best job at that time was to work as a clerk in the court. Then he competed with hundreds of applicants. He failed and was very depressed at the time. , but later he thought about it, and he felt that this failure was very important to him. If he had not failed in the competition, then there would be one more clerk in American society and there would not be an entrepreneurial tycoon or an entrepreneurial tycoon. The PayPal mafia will not change the way humans pay.

The reason why we are obsessed with the success or failure of competition is due to our persistence in competition. We like the competition itself, not the value it will bring. Only by understanding this can we let go of a lot of our attachment to competition.

For example, PayPal had a competitor back then. Both companies made similar payment products. At the height of the competition, Peter Thiel’s engineers all wanted to invent explosives to blow up their rivals, but if they both The two companies continued to compete, and the result of the competition was that no one could make any money. Before the severe winter of the Internet came, the two of them could not get financing, and both of them would die, so they chose 50%-50% at the last moment. After the merger, they became the only and largest leader in the market. Then they quickly obtained financing and became PayPal today.

In this way, we can also understand the merger between Didi and other taxi-hailing software, right?

These mergers all come from Peter Thiel’s revelation: Why do we fight to the death?

But there can’t be competition in life, right?

Peter Thiel pointed out that in our lives, if you can’t find a merger or the cost of merger is too high, then we need to cut through the mess quickly and end the battle quickly and ruthlessly. Don’t fall into In the muddy fighting of the Vietnam War.

Chapter.05

What are the characteristics of those monopolies?

Patented technology: The product you create should be at least ten times more advantageous than previous products, such as Alipay, WeChat and shopping websites.

Network effect: The number of people can be increased through the Internet. At the beginning, Facebook only had classmates in the class. As everyone used it better and better, the spread spread more and more.

Economies of scale: If only 20,000 people use Google, then Google will lose money. But when the average person in the world is using it, it will be very profitable because of its marginal cost. is 0, that is to say, every time a user is added or a user is reduced, there is no impact on the cost. This is the case for BAT.

Brand advantages: Including Apple, Google, and Huawei, these brands will definitely work hard to build their own brands. For them, a brand is something with a marginal cost of 0.

Disney previously announced their financial statements. Their annual revenue was 500E, and movies only accounted for 70E. However, the characters created by these 70E have brought them countless benefits. When these characters are used again, their marginal cost is 0, so Disney can continue to expand and the cost becomes lower and lower.

Contrary to Disney, there are many product companies in China. They make some software and then sell these software to application developers. Once someone counterfeits it and lowers the price, this business will no longer be able to continue. , and then you can only reinvent new things. In this matter, as R&D personnel, they think that as long as they get big customers and have buyers, they will be fine. But we have to know that in this world, without a brand, there is no pricing power, and those without a brand will always face challenges. , it’s five dollars for you and four dollars for others, until the competition reaches the point where no one can make any money. As a result, when the financial crisis hit, the first to collapse in China were large manufacturing companies. They made their products good and cheap. However, when we make a company's products good and cheap, we are actually close to bankruptcy. Far away, because we have no profit margin at all.

You have no monopoly power and no brand, so you are doomed to die.

Only companies that meet these four characteristics can be called monopolies. Monopoly is not a scary word, but the direction we pursue.

Chapter.06

We need to discuss the following three questions:

1. Does success depend on luck or ability?

Peter Thiel said that if we think success depends on luck, then there will be no successful entrepreneurs like Jobs, Zuckerberg, and Elon Musk, because these people will be successful if they do just one. one.

Emerson: Only shallow people believe in luck and opportunity, while strong people only believe in cause and effect.

There are two kinds of laws in this world. One is called the social law. I find connections and get things done. The other is called the natural law. I sow seeds in the spring, continue to care for them, and harvest in the autumn. In a person's life, society Laws will occasionally play a role, but when our timeline is long enough, we will find that it is always the laws of nature that play a role.

Short-sighted people only see social laws. For example, when looking for a job, many people hope to find a certain organization and become an official. But in fact, your life will still be like this after a few years, without any change. So what is the law of nature? After a few years, although you are still an official, you will become increasingly empty. Therefore, we must understand how to view the world from the perspective of natural laws. Success does not depend on luck, but on cause and effect. We must put in a lot of effort to get the corresponding results.

2. Do you think our society is normally distributed or power distributed?

Normal distribution bell curve: some companies make money, some companies lose money, and some companies live or die.

The power law of power distribution: a small number of people have money, and the remaining majority have no money.

Peter Thiel believes that the world follows a power law rather than a bell curve. Why is this?

Investors who think in terms of a bell curve will think that I should put my eggs in different baskets so that I can share the risk, but Peter Thiel believes that if we think in this way, Just like praying, you pray every day to make money, but in fact, the profits you make can easily be eaten up by projects that don't make money. As a result, you still don't make any money.

Therefore, Peter Thiel said that if you want to invest, you must invest in companies that can make money: Only if you devote all your energy to helping the company succeed, can you invest in a company and make it successful. .

In life, the power law is also very important to us.

For example, life is stressful now and we are all short of money, so many people go to Didi after get off work, work part-time jobs in their spare time, open online stores and do micro-business, and use various methods to maintain their daily lives. monthly income.

To put it bluntly, although he has done a lot of things, he is not the best at anything. , If in a few years Didi WeChat Business loses popularity, and his skills have not been significantly improved by then, it will be very dangerous.

Therefore, the author tells us that instead of spreading our energy across many areas, it is better to focus on one point and focus on blasting, such as doing a good job in micro-business and achieving N+1 orders a day. , do your job well and strive to double your salary next year.

When a person invests his energy in a company and succeeds with the startup, this is the characteristic of the power law.

We have found that many people who stay in one place for a long time will discover the power law: Only by drilling a well deep enough can you see water. If your well is not deep enough, It can only be a pit in one place.

3. Be curious and believe in the existence of secrets.

There are two kinds of secrets in this world, one is the secret of nature and the other is the secret of man.

For example, Edison invented the light bulb. This is the secret of nature. This discovery excited him and changed the world.

We may not be as earth-shattering as Edison in our daily lives, but we can still discover the secrets of people. For example, Didi discovered the secrets of people, we can easily take a taxi when we go out, and airbnb discovered The secret of social interaction between people. When traveling, you can stay in the homes of netizens instead of staying in hotels.

The structure of human relationships is also a discovery, and this secret is always there.

So, what do you do when you discover a secret?

Peter Thiel said that if you discover a secret and don’t tell others, the secret will only rot in your heart. If you tell the secret to the whole world, then everyone will spread the secret.

Here, the best size to keep a secret is a company: use this secret as the core point to establish a startup company, and then gradually amplify it and turn it into reality.

Chapter.07

Peter Thiel’s advice:

Find a partner: Never start a business with someone you just hit it off with.

As long as you are innovating, your entrepreneurial work never stops.

The board of directors must be small: Unless your company is listed, the board of directors must not exceed five people, and ownership, management rights, and control rights must be distinguished.

When recruiting full-time employees, you can provide employees with equity shares. Employees who are willing to accept equity shares instead of money are reliable employees.

When recruiting, we must focus on recruiting people with ideas: We are a company established to change China, we are a company established to change the world, and do not use some benefits to seduce some who are just Join those who know how to enjoy it.

Constantly emphasize your ideals in the company: constantly call on everyone to strive for your ideals. You can consider designing some company products such as sweatshirts and hats. These cultures will better call on employees to strive for their ideals. Through these series of actions, PayPal closely unites its employees, supports each other, provides everyone with resources, and continues to achieve success.

Pay attention to promotion and sales: Never think that as long as it is a good product, it will spread. Many good products are ruined due to poor promotion.

People must know how to cooperate with machines: Don’t worry about machines competing with people. Machines only need electricity, which is different from people’s needs, and the advantages of any machine are very complementary. The future human world should be a combination of humans and machines, combining the advantages of humans and machines to form a new world in the future.

Chapter.08

Peter Thiel: We must maintain the same sense of novelty about this world as the ancients saw it for the first time, so that we can reconstruct the world, Protect the future.

This book gives us a lot of reflection not only on entrepreneurship, but also on philosophy, monopoly, from 0 to 1, the power law, believing in the existence of secrets, and always staying curious about the future. Heart.

Competition will make you focus on your competitors and ignore your own development.

There is no perfect market equilibrium. In the real world outside of economic theory, the success of every enterprise is precisely because it breaks the equilibrium and does what other enterprises cannot do, that is, Things from 0 to 1, rather than doing the same thing as other companies.

How Google defines itself depends on what can save it trouble. Not being attacked is a monopoly. You think it is not a monopoly because it has successfully diverted your attention.

If you are not in a monopoly position, you can only focus on short-term interests and cannot make long-term plans for the future, so you are lingering every day.

If you want to achieve a monopoly, you must avoid mainstream entrepreneurial methodologies and take the completely opposite path.