Short Notes on Zero to One – Peter Thiel

I came across Zero to One  (Vietnamese version) thanks to my delay habit of reading. Knew this book so far since it get bangerz from tech startup community not only in Sillicon Valley but also famous in Vietnam. But up to now, I read it as fun (though I have owned it since its initial release 3 years ago).

Now I chose books to read for fun under some recent screening standards I have set: (1) Short, succinct – by what I mean book pages read for fun should be just around 200 pages are maximum (to me 200 pages somehow belong to the “hard” category); (2) Featured/ Outstanding works written by those have proved to be successful by their jobs in their field (business, philosophy, investing whatsoever, to name a few) (Some famous for remix their quintessence; if nothing new, I choose to quit another similar ones by same authors/writers); (3) Straight to some outstanding topics I am interested in or want to know/learn to open my eyes and sharpen my knowledge, expertise.

And Zero to One by Peter Thiel thanks to meeting those 3 criteria is worthy my time to read. This time is a quick reading since after my glancing and skimming time at this book, I have found some essays/notes his share is somehow repeating on competitive advantages/moat topic. However, Peter Thiel is among those investors have invested earliest into seed funding for Paypal, Facebook, LinkedIn (I am sure we all known and used these famous brands/tech services nowadays), he must be special somehow.

What is brillantly hidden bihind Paypal, Facebook, LinkedIn that made him among the early investors pouring money into them?, and why he did see them? – Some questions made me curious about this man and read this book.

And it is.

Zero to One - Notes on Startups - Peter Thiel

Zero to One is Thiel’s notes/essays on innovation, his contrarian thinking (very important and need times updating and learning continuously for businessmen, investors today) versus traditional thinking, economics 101 or old economic schools…

The interesting part is the essay on Monopoly. What Thiel considers monopoly in a specific business must own something unique/exclusivity regard its moats: brand, last mover advantage, distribution/sales, proprietary technology etc. Opposite side to perfect competition in which businesses compete for mediocre return, monopoly to Thiel is good and worth for any next big startup seeking for and broaden. Thiel defends monopoly is not dangerous.

This essay strikes my ever thought before: Is perfect competition existing?, or it (business environment) is dynamic. How ones keep innovating, evolving are more important than busy thinking about its nuances of competition.

Thiel has background in law, philosophy and he turned to business and investing under his venture capital funds by chance (bad luck turns out good for him and bright for our societies nowadays thanks to his funds’ seeding capital pouring into the startups mentioned before). His essays are short, straight to the point, sometimes difficult for non-fundamentals in philosophy like me. Still, it is fun to read him by reading his writing. Like the way I read interview of his same professionals Marc Andreessen

I learned from his thinking (the best to me after reading Zero to One book): very different genre of thinking; controversial in some ways but sparkling ideas.

Read Antifragile by Nassim Nicholas Taleb before and get impressed with the barbell strategy. For investing, technology has permeated into a lot of traditional sectors. Those tech + business guys like Thiel share the same portraits: they envisage and they make it (future) happen. Walk the talk.

In Anti, Taleb believes in venture capitalist and he thinks they are antifragile. A portfolio of some investees got seed funding make behemoth lucrative return (tens fold even hundred/thousands fold for some special cases). If they fail, downside loss is small compared to the big big big upsides.

And Thiel is a type of antifragile venture capitalist. Why don’t spend time to know more another outstanding tech guy knowing finance/investment/compounding law very well. What a typical value investor nowadays should have?

To me, business acumen + capital allocation skills are still main voices to sing today and years ahead. They also need to update innovation, especially into business acumen and capital allocation for fresh ideas like venture capitalist like Thiel has been doing. We don’t know what extents traditional sectors/industries are lagging behind due to their old thinking under old ways of doing business.

P/S: You should read all parts of the book. The essay on valuation on tech startup is eyes-opening to me. Some argue tech startup valuations for Amazon, Facebook etc. are crazy. But please take a look presenting by insiders like Thiel to understand why. Another contrarian thinking. At least, we must have sharp outstanding insights to analyze and protect our decisions when it comes to value investing.

My two amazing crossing minds in the book: One on Happy Businesses vs. Unhappy ones; One on Happy Working Environment:

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