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Peter Thiel's Zero to One Might Be the Best Business Book I've Read (theatlantic.com)
271 points by markmassie on Sept 28, 2014 | hide | past | web | favorite | 90 comments

I've mentioned this before on other threads, but it is worth repeating here. Thiel is basically making the same claims (but with less evidence and I think less rationality) that Tyler Cowen (an economist) has been making for several years. Cowen's views are more nuanced (and in my opinion more reasonable) than Thiel's. Cowen's book "Average Is Over" is an excellent distillation of his thesis.

I haven't read "Average is Over" but I think that Cowen's "The Great Stagnation" covered a lot of the same ground. It was informative and reasonably persuasive, even if one doesn't share his prescriptions for fixing things. It presents the idea of a slowdown in innovation and educational progress causing a slowdown in economic growth, particularly for the median white guy. I don't think Cowen was the first to come up with it, but the book was definitely responsible for getting it talked about regularly. Well worth the quick read.

Good point, I probably should have mentioned The Great Stagnation as well since the two books cover very similar topics. Average Is Over is newer though, so probably better reflects Cowen's current thinking.

Thiel is actually diametrically opposed to Tyler Cowen on one important point:

He doesn't believe that the issue is at all that the low hanging fruit are gone.

"I would argue that there was never any low-hanging fruit; it was always of intermediate height and the question was, were people reaching for it or not" - Peter Thiel


Good point, I tend to be more on Cowen's side with regard to this, but there is definitely room for debate about who is right.

I show my side of the debate by making technology that could have been developed 100 years ago, and was desperately needed then as now.

I dont know - I read them both - I thought both books were pretty interesting ... although I thought that Average is Over focused too much on the Chess examples. Zero to One was good because it was short - I thought the only real "new" big idea was software monopolies can be "positive"

I think the thing about monopolies being positive, or at least not as bad as whatever else (regulating them) is pretty standard thinking for a certain brand of libertarian, which Thiel is.

I saw it more as a rehash of Michael Porter's idea that you should compete to be different rather than "better", instead of the approval of monopolies that many people have seen it as.

Happy to see a Tyler Cowen recommendation.

Thiel is still very much worth reading though. FWIW, Tyler Cowen would say the same; "The Great Stagnation", his book before "Average is Over", is dedicated to Thiel.

Funny you would mention that. I wasn't aware of any connection (thematic or otherwise) between Thiel's work and Average is Over, but by happenstance, I had the latter book in my hand just a couple of days ago. It caught my eye on the shelf at B&N, and I picked it up, skimmed around a bit, and thought "I should read this". But, for whatever reason, I didn't wind up buying a copy right then and there.

Now I think I'll go back and get it and give it a read.

Also, while we're talking books, I'll throw in a plug for The Origin of Wealth by Eric D. Beinhocker. It's a fascinating read for anybody interested in economics, capitalism, etc. It's not targeted at entrepreneurs per-se, but the principles in there have some interesting implications (if true).

i used to read tyler cowens blog a long time ago and visit it sometimes. started out impressed but soon realized he is good as an aggregator of interesting bits.

if even the sentences happen to be the same, i prefer to listen to someone who has real world experience building companies vs just economists whose being wrong has no direct impact on themselves. skin in the game and all that.

There's a balance between the value that comes from having experienced it yourself and the value from being able to step back and generalise the experience of other people.

First-hand accounts always run the risk of generalising the particular but academic accounts run the risk of being too general. In both cases the problem comes from falling in love with your own model and not paying enough attention to inconvenient data.

The one problem I had with Thiel is that he seems to conflate what worked for him with what works in general. Cowen, as an outside observer, has a more objective point of view.

thanks for this, can't wait to dive into this book too

The Hard Thing about hard things by Ben Horowitz seemed to me to be a more focused book, especially if you are reading it to find more about business and startups, Thiel's book is very good, but he tends to deviate from the main subject too much for me.

From what I read, Horowitz' book is very much about the typical VC fueled startup.

At this point in my life, I'm not interested in that except out of curiosity, I'd rather read books by/for/about boostrapped startups.

Where does Thiel's book fall in that range? Reading the comments, it looks like it's way more of an idea book than anything practical, and targetted at people who want to do something new and radical. Fair enough, but it looks like an entertainment read rather than anything applicable.


If you want to know about bootstrapping, then Thiel is not the guy to read. Zero to One is all about growth. And bootstrapping creates small businesses rather than startups (i.e. slower growth).

Slower growth does not necessarily imply smaller or less successful if you extend the time horizon beyond a few years. Data on this is probably hard to come by, but I'd guess also that this is especially true if you consider all the VC backed firms that simply die because they were not a raging success, and burned through all their cash.

Velocity is relative, but slow growth contradicts the definition of a startup. See http://paulgraham.com/growth.html

Completely agree. I found Thiel's book very preachy and strange. Liked the lecture notes a lot more, because they were more detailed and thorough. The Hard Thing is the most depressing book about being a CEO, but that makes it refreshing and interesting to me.

It seems no one mentioned the purpose of this book in the first place and I believe it's one of the important dimensions. Here is part of my review on Amazon: When I started to read the book, I only paid attention to the facts and thoughts the author provides. After a while, I found it is a book that gives readers more questions to pull them from the world they are familiar with so that they may be able to begin to discover a different world. That's the real purpose of this book. The author did a great job on this. I guess he put a lot of thoughts to prepare for the book. And this is what the original materials is for in the first place, lectures for students.

I've read all of the Stanford 183 notes that Blake Masters took, but not the book that just came out. Have any of you read both? Did you think the book was worth it if you already have the notes?

I read both. Class notes were more in-depth, had entertaining anecdotes but I found Zero To One to be more clear and concise explanation of Peter Thiel's thesis.

The diagrams are MUCH better in Zero To One - the class notes had slightly unwieldy prose to convey the same concepts without using diagrams at times.

All that said, I preferred the class notes. Reading Zero To One I personally felt I didn't get much from it that wasn't in the original notes. I find it a little surprising that it took a whole 18 months to have a rehash of the notes released.

Have any of you read both? Did you think the book was worth it if you already have the notes?

Yes and yes: http://jseliger.wordpress.com/2014/09/24/zero-to-one-peter-t...

The class notes, in my opinion, are better. You certainly don't need to read both.

Why did you find them better?

I liked the class notes better. Zero to One seems to target people who want the more important ideas in a denser format. Reading the book was a nice refresher two years after the notes, but not much in there is new.

I read it both. If you enjoy notes a lot, reading book might sense, but don't except tons of new stuff.

It is mostly written in a bit better structure and targets more general audience than class notes.

Link to the notes?


Here's how hyperlinks are actually intended to work:


To add one more point to the discussion... after reading Zero to One, I found that I had a renewed interest it thinking about "big idea stuff" / futurology, etc. I had a realization that I've been pretty negligent about reading up on stuff which purports to talk about "the future to come" and ideas about the kinds of things that Thiel's "definite optimists" might want to work on.

Now futurology is clearly not without it's own issues, and we all know that it is damn hard to make predictions (well, accurate ones anyway) about the future. But I think if nothing else I've been reminded that it's a good idea to at least make some effort to keep up with what the "futurist" crowd are talking about, and also to pull my head up from time to time and look around in domains other than my particular current niche. Materials science? Yay! Energy? Yay! Artificial biology? Yay!

Of course it may be the case that nothing comes from any of this, but it strikes me that it's probably important for an entrepreneur (or would be entrepreneur) to make some effort to stay abreast of this stuff. So I finally finished The Singularity is Near and started looking for good futurist blogs to subscribe to. I feel like I should probably also start reading those "general purpose" science magazines (Sci Am, Discover, Popular Science, New Scientist, etc.) again as well.

What do you guys think? Do you make it a point to keep up with forward looking "stuff" outside of your own domain, or read any "futurist" writing?

The book (and the notes) definitely will get you excited about 'big picture' thinking again. If business books can be separated into 'strategic' and 'tactical' categories, I'd say this book falls undoubtedly into the 'strategic' camp. While these kinds of philosophy-heavy books always give me a high, the lack of tactical content is somewhat disappointing once the initial high dies off. This very well may be the author's intention, as the actual entrepreneurship product-market adventure is left as an exercise for the reader. I suppose that would be my main criticism of the book.

In any event, I found it a very worthwhile read.

I agree. He articulates things I've been unable to.

In particular, that encouraging specialization in our adolescents, at the expense of "well roundedness," can be a good thing for some of them.

Can you expand on the message please? :-) As I read it now, saying "some of them" makes this nearly a tautology.

I have been on the well-rounded side (and have learned some pros and cons of the same the hard way), so am additionally curious to hear. :-)

I get the impression Thiel really means "most if not all of them," but I didn't want to misrepresent.

When he says "well rounded," he means kids who participate in a glut of extracurricular activities to pad college applications and create many possible career paths for themselves.

The argument being that with many potential paths, people tend not to commit to any particular future vision, which results in fewer people with the concentration or desire to build those futures. Elon Musk is presented as a counter-example.

As a college student myself, I think this book should be a required reading for every first year student considering starting something during their college years.

>His most provocative thesis, excerpted in a popular WSJ column, declares that "competition is for losers" and entrepreneurs should embrace monopolies.

I saw him talk a couple of days ago and he said the "competition is for losers" phrase was not what he wrote but the WSJ rewrote the title. His intent (I forget the exact wording) was to avoid competition by doing something sufficiently innovative that there is no close competition, and he cited Google search and the iPhone.

The original title was a variation of Tolstoy's "Happy families are all alike; every unhappy family is unhappy in its own way" along the lines of companies that are alike are unhappy and happy companies do things their own way.

I think he was saying in his own words what the Blue Ocean Strategy people have been pushing for a while. In short, work on creating new markets so you don't get caught up in a race to the bottom (commoditized markets).


This sounds like a confusion between the specific economics definition of "competition" and the everyday colloquial definition. If you find an innovative solution to a problem that is unlike any other firm's offering, that's not "avoiding competition" in the economics sense. In fact, that's textbook competition in the economics sense. Colloquially, we might refer to this as "avoiding your competitors by staying way ahead of them" or some similar phrase.

You make a lot of sense. A lot of good sense. Yup, you do a good job!

But, but, but, and you are not nearly alone, you are not Peter who did PayPal, now has the big bucks, dreams big dreams, and gets famous, and maybe some revenue, by writing books that mostly people at HN can find mostly obvious and mostly improve on!

So, I ask you: Between smarts, hard work, and luck, you'd pick which one?

Thanks a lot guys:

I don't know what they heck you are so upset about: What I wrote is not facetious but genuinely complimentary to baddox. The baddox post was good.

How good? The thinking in that post seems to me to be better than the thinking in the book under discussion.

And, moreover, much of the thinking of posts on this thread at HN seems to me to be better than what is in the books, and I said that.

So, in comparison, the thinking in the book is not very good.

And I read a chapter of the book, have read the corresponding VC Web site, and did get a call from the VC firm and talked for about an hour. Still, generally, the thinking in this thread is better.

So, a question arises: How could the book and its author have done so well for themselves? I offered luck as one possible answer.

And you are torqued at some of that?

Probably worth clarifying: I don't think Thiel is arguing for monopolies. Instead he's arguing for lack of competition via differentiation (i.e. if you're the only one doing something, you're going to have a much easier time of it).

Also worth noting is that this idea isn't Thiel's, but is one that Michael Porter has been putting forward for years now. Of course, Porter is read by MBA students and Thiel is read by people who want to do a startup, so that may explain why this idea seems so new to people.

P.S. if you're interested in reading more about Porter's ideas I can recommend two books. The first is Understanding Michael Porter, which gives a good summary of the main ideas of his works. The second is Different: Escaping the Competitive Herd, which doesn't address Porter specifically, but covers similar ground.

Which is strange because Tolstoy was an anarchist and Thiel would have made him spin in his grave.

> "The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined," he writes. This power law distribution of VC investments means that a few bets will get fabulously unequal returns and it's almost impossible to predict which ones those will be.

Well it's "almost impossible" as long as they believe so and don't learn how to do it. C.f.,


Thiel will be on On Point today. Excerpt of his book there.


After two tours of duty at Stanford (which did little to dissuade him of the notion that college is a waste of time) he founded PayPal

So, um, why did he do the 2nd one then?

Seems a little hypocritical...

It's also worth noting that 0->1 makes claims about the sort of vision that founders have that are directly at odds with all accounts (including his own) of how Thiel's own successes actually occurred. Not slightly misaligned, but directly 100% contradictory.

It's not a terrible book; it's mediocre. It's a mix of the obvious (perfect competition destroys profit), the confusingly expressed (the bit on secrets sounds "deep" until you realize he's expressing something obvious using confusing language), and noise.

If somebody wants to read a good new business book, I'd recommend Creativity Inc, How Google Works, and The Hard Thing about Hard Things long before I'd recommend 0->1.

Totally concur.

Not arguing for or against, but just to echo a good point Peter made about this criticism:

If he didn't have any college experience and made the argument that college is a waste of time, people would challenge that with "well, what do you know? you never went to college."

What better way to realize college is a waste, then to give two solid tries and still receive little value. It could be argued that that would be the only way one could be qualified to cast that judgement.

Except he received enormous value. There is no chance he would have been even in the top 1% had he not attended Stanford (and then Stanford Law).

How is that possible? Did Stanford help him start his ventures at all and contribute to the success of those? Is there specific knowledge that he learned there that helped him succeed?

If you have a name like Stanford (or MIT, Berkeley, Harvard, etc.) behind you that's an enormous advantage and people will pay attention to you regardless of your merits. Thiel got his start in corporate law, then finance. Had he not had this background and pedigree there is no chance VCs would take a risk on paypal.

Edited to add: Just look at who Y Combinator accepts. It's not random people with good ideas and talent. It's people with strong pedigrees. Sure they're probably bright, but are they the only ones who are capable of succeeding? Of course not. It's rather unfortunate that the opportunities for the largest amount of success go to those who are already successful rather than those who never had the opportunity to succeed in the first place.

Yes, going to and excelling at Stanford was absolutely essential.

It allowed him to go work in a prestigious firm in finance and another in law which provided him with personal capital and also connected him with investors which allowed him to start an investment fund, move back to the Bay area and gave him the time to search for and evaluate investments. Presumably this is how he met Max Levchin and invested in his company.

It also allowed him to be confident and respected by others, both of which were extremely important to his success.

Interesting - the main value of school is signalling and networking. The actual (expensive) education isn't really needed.

If Thiel recognized this, he might try to give people a way to get the signal/network without college, thereby saving lots of money and cutting out the middleman. If he wanted to be arrogant, he might name it the Thiel Fellowship.

There are important signals that come out of academic success, like the ability to do something hard over a long period of time, that are difficult to easily replicate without doing something that is essentially school-like.

So what is going on, then, do you think? Is he oblivious or in denial about it? Is he lying? Or something else?

I think he believes, like most successful people, that he had inherent skill and talent and those qualities pre-destined him for success.

Which doesn't exclude the value of a Stanford degree.

How did he get the money for his first venture?

Had he not gone to Stanford then would he have gotten the same network and met the same role models? Was this addressed?

Should we not better read the books that this people read, to get rich and famous ?

Which books did they read ?

It's available as a sane [drm-free] epub book to buy anywhere?

Does anyone else have an opinion on this book, I dismissed it at first but this has me reconsidering.

It's largely a rehash of Tyler Cowen and Michael Porter (whether Thiel has read them or not I don't know, but he covers very similar ground). Some interesting ideas, but it's not going to change your life. One thing that bothered me about it was his assumption that the important problems he's so interested in aren't being solved due to lack of effort. The idea that certain problems just aren't economically feasible currently was not explored.

I'm only on chapter 8 but it is a very good book so far.

The thoughts conveyed in the book are clear and integrate well into a larger world view.

Even if you don't agree with Peter, at least you'll get a well articulated view of the world and one that'll make you question some of your beliefs.

He makes a lot of claims without going into too much detail to argue any given one of them.

He says a lot of things that are going to make a lot of people mad because it goes against the things they want to be true. For example, he thinks competition between firms is wasteful and that business owners should seek to build a monopoly over something.

He substantiates this view with what's in my opinion quite lucid reasoning gleaned from his experience both founding Paypal and his later exploits like Palantir. But it will be insufficient to convince many.

I think it's one of the best business books I've ever read. I'd rank it about second, right below The Four Steps To The Epiphany. I picked it up off a shelf at Barnes & Noble the day after it came out, sat down in the cafe, and nearly read the entire book in one sitting. Went home, finished it, and then promptly started reading it a second time the next day. After that, I read it a third time. I plan to read it again.

Yeah, it's that good.

Now, that said, I am an unabashed Peter Thiel fanboy, so you may think that this is just my bias showing through. But I don't think so. I think Thiel hits on some very profound and significant insights in this book. It's not a manual or anything close to a TFSTTE style "paint by numbers" guide, but the seven questions that he presents in the chapter on Cleantech make a very solid framework for evaluating your own ventures, IMO.

The only caveat I'll offer is this: I don't presume to disagree with Thiel about anything, and there's nothing in the book where I'd say I think he's wrong in any objective sense. But I do think there are places where he glosses over some nuance and opts for the more hyperbolic presentation of an idea, in a way that can make certain bits seem self-contradictory.

He also comes off a slightly dismissive of the "lean startup" approach, seemingly because he sees evolutionary processes as only capable of creating incremental advances, as opposed to significant new creations. This is as close as I get to disagreeing with him, as I don't think there's anything about being a "lean startup" or doing Customer Development that mandates only working in the realm of incremental improvements. Now, as Steve Blank says, if you're inventing a cure for cancer, you don't need Customer Development. But there's some middle ground between "minor improvement in sharing cat pictures" and "a cure for cancer". This is where I think his more hyperbolic presentation and disregard of a certain level of nuance hurt the book a bit.

Another point to pay attention to is that Thiel may use definitions in a way that doesn't fit your pre-existing mindset, or he may make certain assumptions. Probably the main place this stands out to me is in how he seems to equate "competition" with "perfect competition", again ignoring the middle-ground. There's a similar issue with the way he uses "monopoly" where he clearly doesn't (necessarily) mean "the absolute only supplier for X" but is rather referring to a company that has achieved a level of dominance that allows it to profit in a radically significant way (beyond other related players, for example).

Overall, read it as a catalog of a number of Really Good Ideas for creating great startups, and I think you'll find it valuable. Don't assume any one thing he says is The Absolute Truth, but think about the gray area in between the poles. Don't take the hyperbole at face value, but read with a certain air of skepticism, and infer the in-between stuff.

That was my take anyway. Maybe after I read it for a fourth time my opinion will change. :-)

I did not regret the time that I spent reading this book. I thought it was very well laid out. He starts with some core ideas which I would say are relatively "contrarian." These ideas come together very well at the end to build an interesting model from which you can perceive the world through.

I'll definitely be reading it again.

I wrote a review of it today. Not very in depth, just some thoughts.


It's not necessarily a business book. His thesis is the one he articulates on his speeches: that we need a more deterministic, less statistically-oriented world. I found it to be very concise and interesting reading.

It's a fun, interesting read. If you're interested in globalization, or economics, you'd enjoy it. The stuff on startup practices is pretty standard and nothing new imo.

I like it a lot. Quite controversial and a bit on too high-level for me, but it was fun and informative to read.

I think it's awful. I only finished it because we're discussing it in a book circle.

Your statement has a near zero amount of useful information in it.

True, just trying to balance the overly positive comments, without spending a lot of time laying out arguments.

You literally just defined the least valuable form of participation in any discussion.

Neither does your statement. Neither does this one.

I agree. In my mind only Clayton C. Christensen and Peter F. Drukert have been able to write about business without saying the obvious and actually delivering a philosophy rather than obvious observations.

Would anyone mind to tell me exactly what I said that triggered the download. I am seriously interested.

No idea. Sometimes ppl just downvote for spurious reasons. It seems like you added some information to the conversation, so I upvoted your comment.

Along with several things that Peter Thiel has said recently that made me think "well, that surely decreases his authority in my mind" when he recently professed his love and addiction to the Drudge Report I could not help thinking that he really lacks any credibility. Someone who is addicted to drudge mental trash and right wing rage-baiting really kind of shows a deep lack of significant mental capacities.

This could be in a textbook as an example of an ad hominem attack.

The Drudge Report is a political tabloid. Which stories it aggregates and which stories it ignores is a compelling read into right-wing bias (as presented by one man, though I'm sure he has help these days). Matt Drudge also has a flare for writing headlines.

I wouldn't judge Peter Thiel because he (supposedly) finds it entertaining to keep tabs on the right-wing, and a big part of media culture (regardless of what his political subscriptions are).

I like to check Drudge Report. It answers the "what do the wingnut think tanks want me to think today?" question, which forms a part of my mental picture of the current political state of affairs.

I really respect and enjoy Peter's opinions on a lot of matters, but politics isn't really one of them. That being said-- at present there is not a single person in the entire sphere of politics saying anything interesting.

The left is irrelevant. The right is irrelevant. Libertarians are irrelevant. Nobody in politics has any good ideas about anything, and most political jaw-flappers sound like they're hailing from some kind of parallel universe where their obsolete world views make sense. For many years I've had this profound sense that all existing political philosophies have failed in that they are unable to suggest any viable solutions to today's problems.

Some of the smartest people I know tend to do this. There's one Google engineer who is a friend of mine who's incredibly talented, she graduated from a top school, straight 4.0. She did her undergrad+masters in under 4 years without taking any summer classes. Extremely well respected at work -- yet outside of work she likes to wind down and read gossip magazines.

Another friend graduated valedictorian, went to work at Goldman Sachs, and on the offtime he enjoys listening to hardcore rap and ludacris.

Been hearing a lot about Zero to One. Time for my kindle to wake up and get me Zero to one.

It's great but all that content was available for years right? Are people just now finding out about the Stanford 101 Blake Masters notes?

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