Peter Thiel: From Zero to One

About 1 in a 100 startups in the USA get funded by VC. Out of those that obtain Venture Capital funding, 1 in a 1000 go on to become Unicorns i.e. attain a valuation of over 1 billion dollars. Peter Thiel and the team he put together at PayPal have gone on to create no less than 8 Unicorns: Elon Musk founded SpaceX and Tesla Motors, Reid Hoffman, LinkedIn, Steve Chen, Chad Hurley, and Jawed Karim, YouTube, Jeremy Stoppelman and Russel Simmons, Yelp, David Sacks, Yammer, and Peter Thiel himself, PayPal and Palantir. Thiel was also the first outside investor in Facebook.

What was the magic juice? In Peter Thiel's words ...

"From the start, I wanted PayPal to be tightly knit instead of transactional. I thought stronger relationships would make us not just happier and better at work but also more successful in our careers even beyond PayPal. So we set out to hire people who would actually enjoy working together. They had to be talented, but even more than that they had to be excited about working specifically with us."

"Startups have limited resources and small teams. They must work quickly and efficiently in order to survive, and that's easier to do when everyone shares an understanding of the world. Internal peace is what enables a startup to survive at all."

"This is why it's crucial to choose wisely; every single member of your board matters. Even one problem director will cause you pain, and may even jeopardise your company's future."

Thiel goes on to stress the absolute necessity of discovering a secret, of identifying a unique opportunity that others don't see, the absolute necessity of starting by dominating a small market, the absolute necessity of sales and having one distribution channel that works.

And of building proprietary technology that is an order of magnitude better than its nearest rival, of the network effect, economies of scale and branding; of durability, of not disrupting or competing but collaborating, of creating genuine monopolies that innovate rather than being commodatised by competition, of risking boldness rather than triviality, of aligning not only energies but also financial incentives.