Zero To One Summaries – Monopoly The Market Place
Few of my last post, I had said that I am going to start-up an app that will take over the world right. I already know the methodology and the execution process which are the lean startup method and the 4dx system, respectively. The problem is these two methods are just to kick-start my dream project and this is not how to thrive in startups. Then, I re-read Zero to One to understand what should I have done. And now, I understand that I need to create something new to monopoly the market place. So My app will not be snapping receipt anymore since snapping receipts had already been done before. I’m done with it.
In fact, Zero to One is a great book for me since it is about notes on start-ups and how to build the future. I should have re-read it earlier. Plus, if you are like me, trying to learn how to create a new technology business from scratch, then this is the book for you. It was written by Peter Thiel who co-founded Paypal and they sold to eBay for 1.3 billion. So, this guy knows a lot about investing and starting up business. He is not some guy who writes a blog about startups. He once lives in that shit. Frankly, this guy is legit.
From the book, I learned two most important things.
1. Avoid Competition At All Cost.
Yes, I mean it. Never try to fight the giant when you are starting up no matter how many investors are backing you up. The main reason is, competition would be wasting a lot of resources, money and your time. Also, it is a never ending competition where each day is a day to fight another day. It’s tiring and exhausting. Just like war, if you win you still lose a lot of money and if you lose, you lost everything.
2. You Need To Monopoly The Market.
You heard that right. Create your own market and become the big fish in the small pond. As Peter Thiel said, to win in business you have to monopoly the market. The secret technique is to act like you are not in control of the market place although you are. Just like what Google do to Yahoo! and Bing search engines. Google would always say that they have a big competition from Yahoo! and Bing although most of the search engines are conquered by Google.
Therefore in the business world, to win the game monopoly is the only game you want to play. Especially if you are a technology company like Facebook, Microsoft, and Apple. All of these tycoons company came and monopoly like crazy. Additionally, a technology company is more to a long term growth and profits since the follow the opposite growth of a successful non-technology company.
For example, Twitter went public on 2013 and was valued at 23 billion – more than twelve times New York Times market capitalization. Even though New York Times earned 133 million in 2012 while Twitter lost money. But, it doesn’t matter to Twitter because a great business is defined by its ability to generate cash flow in the future as stated by Peter Thiel. Thus, the investor expects Twitter will take over newspaper monopoly over the next decades.
For your information, Ali Baba group also during starting up, the first 3 years of starting up, they don’t receive any profits at all. As Jack Ma said, the only thing that kept Ali Baba going is there are a lot of people saying thank you for their services.
P.S. The next post would be about how to monopoly the market place. Stay tuned.