Peter Thiel, who is the founder of Pay Pal, once delivered a lecture at Stanford University USA to guide the students on how to become a successful entrepreneur. One of his students, Blake Master, made detailed notes and circulate these note outside the university to help other entrepreneurs. Then Peter working with the Black Master converted these notes to a book so the whole world could reap the benefits
I recently read the book from Zero to One by Peter Thiel, and I will share the principles of entrepreneurship, which I have learnt by reading this book.
[My name is Iftikhar Anjum, I am a digital business coach and co-founder of the Institute of Digital Entrepreneurship Pakistan; here our mission is to help digital entrepreneurs to become successful in their ventures.]
Let’s learn from Peter Thiel ‘s wonderful book From Zero to One.
Principal 1: Go from zero to one
Normally when we start a business we copy the successful model and try to do the same or try to bring some innovation. This is called horizontal progress. In this way, we may get some success but not a long-term success. You have to choose something, which has not done before if you want to be successful.
For example, if people are using horses for travelling and you have brought a faster horse in the market or a carriage you are making horizontal progress. You are going from 1 to n, which will not make a huge success you are introducing a car then you are making vertical progress and you are going from zero to 1, which is the real progress.
If you want to create a big name in the world of business you have to make vertical progress rather than making horizontal progress, which is useless.
Every big event occurs once in this world. The next Bill Gate will not create an operating system, the next Mark Zuckerberg will not make a social media platform and the next Larry Page will not create a search engine.
Principle 2: Become a monopoly and avoid competition
You have to avoid competition if you want to make money. The business is useless if it is not creating money. The competition reduces profit and monopoly maximizes profit.
In 2012, airlines in the USA were making only 37 cents on a passenger and Google was making 21% profits. The airlines made 160 Billion dollars and Google made just 50 billion but Google earned profit 100 times more than the airlines.
Airlines were reducing prices to beat the competition and Google was enjoying a monopoly.
Principle 3: Start with a niche market then Dominate
Start to serve a small group of people then expand your horizon. It’s better to be a big fish of a small pond rather than being a small fish of the big sea.
Amazon first started with books, then provided CDS and then moved to other things, now you can buy almost anything on Amazon. Although Jeff Bezos had the vision to build a store for everything they didn’t do that at once.
Similarly, PayPal initially resolved the problem of a small group of people who buy on eBay; later on, the facility was extended to the layman for their daily business transactions.
You should work on an idea, which has not been explored yet if you want to make a big business. You should always start a business for which you can create a monopoly. Start to target with a small group then extend your products or services to a new group step by step.