i loved this book. it read quickly (2171 pages on the kindle) and reminded me of the philosophical simplicity yet profoundness of An Introduction to Zen Buddhism or the Tao Te Ching. below are my favorite thoughts that are applicable to any founder:
on his central tenets:
- it is better to risk boldness than triviality.
- a bad plan is better than no plan
- competitive markets destroy profits
- sales matters just as much as product
on being a contrarian:
The most contrarian thing of all is not to oppose the crowd but to think for yourself
The business version of our contrarian question is: what valuable company is nobody building
on monopolies and competitive environments:
All happy companies are different: each one earns monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition
on what it means to monopolize:
Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding
on working backwards:
Grandmaster Jose Raul Capablanca put it well: to succeed, “you must study the endgame before everything else”
on why do startup:
A startup is the largest endeavor over which you can have definite mastery. you can have agency not just over your own life, but over a small and important part of the world.
on simple rules for VC investing:
This implies two very strange rules for VCs…first, only invest in companies that have the potential to return the value of the entire fund…rule number two: because rule number one is so restrictive, there can’t be any other rules
Every single company in a good venture portfolio must have the potential to succeed at vast scale
As we said, even the best venture investors have a portfolio, but investors who understand the power law make as few investments as possible
on what to build:
There are two kinds of secrets: secrets of nature and secrets about people
on Thiel’s law on startup foundations:
A startup messed up at its foundation cannot be fixed
As a founder, your first job is to get the first things right, because you cannot build a great company on a flawed foundation
on startup compensation:
A company does better the less it pays the CEO - that’s one of the single clearest patterns I’ve noticed from investing in hundreds of startups.
However, high cash compensation teaches workers to claim value from the company as it already exists instead of investing their time to create new value in the future
Anyone who prefers owning a part of your company to being paid in cash reveals a preference for the long term and a commitment to increasing your company’s value in the future
on how to interview:
But there are two general kinds of good answers: answers about your mission and answers about your team
Startups should make their early staff as personally similar as possible
on how to prevent internal fights:
Most fights inside a company happen when colleagues compete for the same responsibilities
on sales and distribution:
Superior sales and distribution by itself can create a monopoly, even with no product differentiation
Look around. if you don’t see any salespeople, you’re the salesperson
on the 7 key things to build a world class startup:
- the engineering question: can you create a breakthrough technology instead of incremental improvements?
- the timing question: is now the right time to start your particular business?
- the monopoly question: are you starting with a big share of a small market
- the people question do you have the right team?
- the distribution question: do you have a way to not just create but deliver your product?
- the durability question: will your market position be defensible 10 and 20 years into the future?
- the secret question: have you identified a unique opportunity that others don’t see?
on the myth of the founder:
The single greatest danger for a founder is to become so certain of his own myth that he loses his mind. But an equally insidious danger for every business is to lose all sense of myth and mistake disenchantment for wisdom