#278 Peter Thiel
Founders
Economies of scale, branding, and tech giants: Insights from Peter Thiel's book
Creating a product has a fixed cost and can be spread out over greater quantities of sales/nSoftware startups can enjoy dramatic economies of scale due to low marginal cost of production/nBranding is a powerful way to claim a monopoly/nApple is currently the strongest tech brand
What I learned from rereading Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel.
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[4:01] Jobs's return to Apple 12 years later shows how the most important task in business-the creation of new valuecannot be reduced to a formula and applied by professionals.
[5:00] A really important sentence to understand one of the main points in Peter’s book: Apple's value crucially depended on the singular vision of a particular person.
[5:00] A unique founder can make authoritative decisions, inspire strong personal loyalty, and plan ahead for decades.
[6:00] Conspiracy: Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue and Zero to One: Notes on Startups, or How to Build the Future (Founders #31)
[7:00] Properly understood, any new and better way of doing things is technology.
[8:00] By creating new technologies we rewrite the plan of the world.
[9:00] The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative.
The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.
[10:00] The minute that you understand that you can poke life and actually something will pop out the other side, that you can change it, you can mold it. That's maybe the most important thing. It's to shake off this erroneous notion that life is there and you're just gonna live in it, versus embrace it, change it, improve it, make your mark upon it. —Steve Jobs
[11:00] Brilliant thinking is rare, but courage is in even shorter supply than genius.
[13:00] A startup is the largest group of people you can convince of a plan to build a different future. A new company's most important strength is new thinking.
[14:00] What follows is not a manual or a record of knowledge but an exercise in thinking. Because that is what a startup has to do: question received ideas and rethink business from scratch.
[14:00] The Founders: The Story of Paypal and the Entrepreneurs Who Shaped Silicon Valley by Jimmy Soni. (Founders #233)
[17:00] Their casual way of conducting affairs did not appeal to me. — Random Reminiscences of Men and Events by John D. Rockefeller (Founders #148)
[18:00] My number one repeated learning in life: There Are No Adults. Everyone's making it up as they go along. Figure it out yourself, and do it. —Naval Ravikant
[19:00] Bill Gurley’s answer to the question For people who were there, does this feel like dot-com bust level unwiding yet? Yes. Link to tweet
[21:00] Peter’s 4 principles for founders:
1. It is better to risk boldness than triviality.
2. A bad plan is better than no plan.
3. Competitive markets destroy profits.
4. Sales matters just as much as product.
[22:00] The most contrarian thing of all is not to oppose the crowd but to think for yourself.
[22:00] By “monopoly,” we mean the kind of company that’s so good at what it does that no other firm can offer a close substitute.
[24:00] Every business is successful exactly to the extent that it does something others cannot.
[25:00] Durability has always been a first rate virtue in Charlie’s eyes. — Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger. (Founders #90)
[27:00] If you focus on near-term growth above all else, you miss the most important question you should be asking: will this business still be around a decade from now?
[27:00] There is no shortcut to monopoly
[28:00] A substantive advantage makes your product difficult or impossible to replicate.
[30:00] The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.
[32:00] Shallow men believe in luck. Strong men believe in cause and effect.
[32:00] Victory awaits him who has everything in order.
[33:00] My heroes are people who took epic journeys into the unknown often at substantial personal risk. I am simply following the path that they carved into history. —Explore/Create My Life in Pursuit of New Frontiers, Hidden Worlds, and the Creative Spark by Richard Garriott.
[35:00] Instead of pursuing many-sided mediocrity and calling it "wellroundedness," a definite person determines the one best thing to do and then does it. She strives to be great at something substantive— to be a monopoly of one.
[36:00] Long-term planning is often undervalued by our indefinite short-term world.
[39:00] Monopoly businesses capture more value than millions of undifferentiated competitors.
[40:00] Most startups fail and most venture funds fail with them.
[43:00] You cannot trust a world that denies the power law to accurately frame your decisions for you, so what's most important is rarely obvious. It might even be a secret.
[44:00] I also believed then, as I do now after more than fifty years as a money manager, that the surest way to get rich is to play only those games or make those investments where I have an edge. — A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market by Ed Thorp. (Founders #222)
[45:00] Schlep Blindness by Paul Graham
[46:00] Great companies can be built on open but unsuspected secrets about how the world works.
[47:00] Conspiracy: A True Story of Power, Sex, and a Billionaire's Secret Plot to Destroy a Media Empire by Peter Thielby Ryan Holiday
[48:00] The best entrepreneurs know this: every great business is built around a secret that's hidden from the outside.
[51:00] Keith Rabois on Peter Theil insisting on focus
[54:00] Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true.
[56:00] Advertising doesn’t exist to make you buy a product right away; it exists to embed subtle impressions that will drive sales later. Anyone who cannot acknowledge its likely effect on himself is doubly deceived.
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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth
Be like Gareth. Buy a book: All the books featured on Founders Podcast
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