book review: Zero to One

summary

A short review of the excellent Zero to One, mostly analyzing an important question it ask early on: "What important truth do very few people agree with you on?"

What important truth do very few people agree with you on?

After finishing some books, I often reflect over the ending or message. At times, the closing point/passage is so poignant that I mull over, dream about, or debate it with others. However, there are times when a book doesn't leave me dazzled and in awe right off the bat. I read it and move on, but the ideas it brings up burrow deep into my mind and resurface from time to time. Then, bothered by the scattered ideas, I re-read the book, hoping to make sense of the bits and pieces I remember and to help re-evaluate the ideas in light of recent experience or after comparing it further with past memories. And that's when I realize that what was a three star venture turns into a five star piece of gold. And that, in a nutshell, describes my experience with Zero to One.

Thiel does an excellent job of going over not just aspects of starting a company that should be considered---who is your real competition, what industry are you in, etc.---but asks a key question: What important truth do very few people agree with you on?. He then goes on to show why asking this question can lead one to unexpected areas of thought and how this style of thinking, and pursuing the ideas generated from it in spite of pushback from others, sparked great entrepreneurs to become successful. And more than that, as a scientists, it caused me to look at my own field with newly skeptical eyes, ever more keen on what are fads and what gems of knowledge might be overlooked because they are not in style.

For example, in systems neuroscience the current trend is toward recording from more neurons, in more brain regions, and ever increasing granularity as to the genetic type, projection patterns, and inputs a neuron receives (see BRAIN 2025: A Scientific Vision, though they also give some focus to glial cells as well). A great deal of money is being spent pursuing the holy grail of 'understanding how the brain codes for X behavior'. And yet, when you read most recent papers, there is a glaring assumption that neuron spikes (when neurons internal membrane voltage reaches a certain potential) codes for information in the brain and helps produce specific behaviors. This assumption, the neuron doctrine, is so ingrained that it is rarely discussed or in need of justification. And yet, if one starts seeking an answer to Thiel's question within this context, you will inevitably start searching for truths that everyone believes but which might be ripe for new thinking. Thus, one might rapidly start looking at literature on electrical coupling (see Electrical synapses in the mammalian brain), glial signaling, and other forms of information transfer in the brain with more rigor and take them into account when designing studies. And that is only with cursory thinking along these lines.

On the more startup side of things, I thought he was just going to list what was needed to get a startup up and running (e.g. little sleep, some luck, and a good idea), but instead we get a rather broad analysis of the current state of business and what to look out for. To this end, he discusses how to appropriately size your market, common errors that entrepreneurs and businessmen make in terms of composition of the board, how to properly compensate early and late employees and more importantly, sales and distribution strategies. He goes on at some length about why monopolies are the real ideal and how competition is both bad for business and for society as a whole. The book would have benefited if he gave more examples of where monopolies fail or how competition can be beneficial. As it is he points to successions of monopolies in the tech industry, but doesn't give a critical eye to the AT&T-IBM-Microsoft-Google-Apple string of monopolies. Do monopolies and the high profits they inspire actually promote more rapid product development cycles and better working conditions for their employees? Or is competition an effective way to promote a variety of ideas and allow selection of the most optimal for society? These and similar questions don't get adequate treatment.

In addition, it would have been interesting to hear his thoughts on Collins's and Porras's Built to Last, which hypothesizes that a great vision is better than a great idea or leader in building a lasting company, something that seems to be the antithesis of many startups/businesses today. In light of Thiel's tendency toward contrarian thinking, it would have been nice to see if he had any additions to this hypothesis/observation. Or if in the world of startups, where some people might be out to just get bought by larger companies, you even need to worry about such long-term goals/aspirations.

He goes on for a bit about power law dynamics in hedge funds and elsewhere is interesting, especially as he applies it to the educational system. The idea is that most of your returns come from only a couple of investments, thus it is better to invest in a few companies that have the chance of becoming superstars and thus recouping the loss if all the other investments fail. Using this logic, he argues that the current diversification in skills that one sees in students is actually a bad strategy because it is actually better to invest time in a couple skills that will yield dramatically more efficient and productive results that spreading them out over skills you might not be that good at. It sounds like basic economics 101, e.g. comparative advantage, but putting it in the context of exponential gains perhaps makes the argument more salient. However, he doesn't seem to give much analysis to the counter-argument: gaining a large diversity of skills early might allow someone to recognize gaps in one area that can be filled by discoveries in a different field.

However, rather than allow students to go off pursuing a narrow niche is a specific subfield, it seems that taking his initial question and having it asked regularly in the classroom would lead to much more critical thinking and questioning of where the knowledge students are being given comes from, how do we know it to be true, and what other ways could the data, historical record, etc. be interpreted (e.g. what are the motives and underlying assumptions of the people feeding you the information)? This might be a bit much for younger students, but it would at least put them along a better path than what we have now, which is a greater focus on memorizing knowledge than understanding it and placing it within a conceptual framework.

In some sense, while this book might not explore particular topics in great depth, it's central points are so thought provoking that my opinion of it continues to grow. What started out as a three star has morphed into a five star book. There is a lot of power in his initial question: "What important truth do very few people agree with you on?". And really, if you take time to think about this, it really causes you to start questioning many ideas and concepts that you've taken for granted as being true. And that's one of the best things a book can do.

-biafra

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