Category Archives: Business

Peter Thiel’s Zero to One

I finished Peter Thiel’s Zero to One some weeks ago and found it fascinating. Thiel co-founded PayPal and Palantir, and made early investments in Facebook, SpaceX and LinkedIn. In the book he shows us what successful startups are made of.

Thiel compares doing new things (startups) with copying things that work (established companies). In the global scale, these correspond to technology versus globalization. With the recent decades’ focus on globalization, technology has been playing a second violin. Perhaps this is the reason why growth has slowed in developed economies.

What is missing? Ambitious plans. The world needs new Apollo programmes: ambitious goals with definite plans. For some reason, people in general have lost their their belief in planning. In startup world, you can see this in the lionization of lean startups.

Successful startups plan big. Thiel mentions seven things that lead to success. For example, Tesla has them all:

  1. Technology: So good that even its competitors rely on it.
  2. Timing: It extracted $465 million loan from government during the clean tech boom in 2010.
  3. Monopoly: It built a small but total monopoly with its roadster and only then expanded down market.
  4. Team: Strong in both technology and sales.
  5. Distribution: Tesla has its own network of retail stores.
  6. Durability: Strong brand and continuing innovation.
  7. Secrets: Tesla had the insight that fashion drove sales in clean tech. So they built a car that made their owners look both eco-friendly and cool.

I found the book really fascinating. For me the main takeaway was that to build something ambitious, you have to believe you have control over it. In agile software development circles, have we become trapped in our mindset of indeterminism and iteration?

Camelot is only a model

Sir Lancelot: Look, my liege!
[trumpets play a fanfare as the camera cuts briefly to the sight of a majestic castle]
King Arthur: [in awe] Camelot!
Sir Galahad: [in awe] Camelot!
Sir Lancelot: [in awe] Camelot!
Patsy: [derisively] It’s only a model!
King Arthur: Shh! [imdb]

Forbes has an article of Clayton Christensen’s recent keynote. It’s easy to read as a crititicism of profit maximization and business schools.

But they are not the real problem. The real problem is taking a model and thinking it is a precise description of reality. Every model has its limits.

The last thing we need now is blind following of a new model. As much as customer centricism and net promoter score are good things, profit maximization and ROI are still as useful as before. All of them are tools that help us understand the reality better, not replacements of reality. They are not more than that, but not less than that either.

Let’s not go to Camelot. It is a silly place.