Zero to One 读书笔记

Zero to One
Notes on Startups, or How to Build the Future

Peter Thiel


【1】 The Challenge of the Future

Future:
It’s going to be different;
It must be rooted in today’s world.

Progress:
Vertical / Intensive Progress (Doing new things): e.g. technology
Horizontal / Extensive Progress (Copying things that work): e.g. globalization

Technology:
Any new and better way of doing things is technology

Startup Thinking:
Startups operate on the principle that you need to work with other people to get stuff done, but you also need to stay small enough so that you actually can.
A startup is the largest group of people you can convince of a plan to build a different future.
A startup has to do: question received ideas and rethink business from scratch.

【总结】创业是基于质疑现有想法和重新思考商业后提供一种新的更好的做事方式来重塑未来，这种进步是一种纵向的扩张，而不是横向的复制。


【2】 Party Like It’s 1999

The first step to thinking clearly is to question what we think we know about the past.

A Quick History of the ’90s
1989 Nov: Berlin Wall came down
1990 –mid: US in recession -> 1992 July: unemployment continued
1992-1994: General malaise
Anxiety about globalizations
Jobs flowed to Mexico & Bush won Ross in US
Japan outstanding in semiconductor war
Internet for commercial use was restricted <- Lack of user-friendly web browsers
1993: Mosaic browser was officially released -> Netscape
1994: Navigator browser released by Netscape
1995 August: Netscape IPO
1996 April: Yahoo! IPO
1997 May: Amazon IPO
1998 Spring: Stock had more than quadrupled -> Internet market had gone crazy
1997 July: The East Asian financial crises -> Thai, Indonesian, and South Korean
1998 August: Ruble crisis in Russia -> US LTCM (a highly leveraged US hedge fund)
2000 –mid: euro from $1.19 in 1999 Jan to $0.83 -> G7 Central Bankers with a multibillion intervention
1998 Sept: Backdrop for the short-lived dot-com mania – a world in which nothing else seemed to be working

Mania: September 1998 – March 2000
Silicon Valley gold rush
Every week, dozens of new startups competed to throw the most lavish launch party
Legions of people decamped from their well-paying jobs to found or join startups

Lessons Learned
Dogma in the startup world from the Dot-com crash:
1 Make incremental advances -> Small, incremental steps are the only safe path
2 Stay lean and flexible -> “unplanned” & “iterate”
3 Improve on the competition -> already existing customer
4 Focus on product, not sales -> only sustainable growth is viral growth
Yet the opposite principles are probably more correct after the crash:
1 It is better to risk boldness than triviality
2 A bad plan is better than no plan
3 Competitive markets destroy profits
4 Sales matters just as much as product

【总结】基于互联网泡沫的历史所形成的创业世界的教条也许是有问题的，与之对应的理念也许更加正确：胆大创新比细微跟进更优；计划比无计划试错更优；竞争会消耗利润；销售和产品同样重要。


【3】 All Happy Company Are Different

What valuable company is nobody building?
Create value & Capture value

Perfect Competition:
Market determines the price -> No Company makes an economic profit
Monopoly:
Set its own price
Lesson: If you want to create and capture lasting value, don’t build an undifferentiated commodity business.

Lies People Tell
Perception: Firms are similar
Really: Differences are deep

Monopoly Lies -> conceal their monopoly
Bragging about their great monopoly invites being audited, scrutinized, and attacked -> Conceal their monopoly usually by exaggerating the power of their (nonexistent) competition
e.g. Google
As a search engine: 68% search market & 95% revenue comes from search advertising -> Monopoly
As a multifaceted technology company: 0.24% consumer tech market
Monopolists disguise their monopoly by framing their market as the union of several large markets (e.g. search engine ∪ mobile phone ∪ wearable computers ∪ self-driving cars)

Competitive Lies -> understate the scale of competition
Opposite lies (the biggest mistake a startup can make)
The fatal temptation is to describe your market extremely narrowly so that you dominate it by definition.
e.g. Start a restaurant that serves British food in Palo Alto
No one else is doing it -> Entire Market (only true if the relevant market is the one for British food specifically)
Actual market might be Palo Alto restaurant market in general / nearby towns also account
Non-monopolists exaggerate their distinction by defining their market as the intersection of various smaller markets (e.g. British food ∩ restaurant ∩Palo Alto)

In business, money is either an important thing or it is everything.
Only one thing can allow business to transcend the daily brute struggle for survival: monopoly profits.

Monopoly Capitalism
Profits come out of customers’ wallets, and monopolies deserve their bad reputation – but only in a world where nothing changes
Creative monopolists give customers more choices by adding entirely new categories of abundance to the world. Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making it better.
The history of progress is a history of better monopoly businesses replacing incumbents.
Monopoly is the condition of every successful business
All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.

【总结】每个成功的企业都不一样，但都是垄断者，只有垄断者利益才能突破企业的生存瓶颈。往往，这些创新的垄断者通过提供全新的内容以丰富世界让其变得更好。但垄断者通常为了避免“垄断”带来的弊端，以扩充其面，将公司置于更大的多面竞争市场上以掩盖其垄断角色。


【4】The Ideology of Competition

Competition is an ideology – the ideology – that pervades our society and distorts our thinking.

Two models for understanding almost every kind of conflict:
Marx: people fight because they are different. The greater the differences, the greater the conflict.
Shakespeare: all combatants look more or less alike. (Superior guide in Business)

As a startup, each clan had been content to leave the other alone and prosper independently.
Winning is better than losing, but everybody loses when the war isn’t one worth fighting.

If you can’t beat a rival, it may be better to merge. (neutral ground)
Sometimes you do have to fight. Where that’s true, you should fight and win. There is no middle ground: either don’t throw any punches, or strike hard and end it quickly.
Recognize competition as a destructive force instead of a sign of value

【总结】商业竞争往往发生是因为其相似性，而商业竞争是一种吞噬利益的破坏性力量，所以应该减少相似性而尽量避免竞争产生。无法打败对手时，合并是更好的选择。


【5】 Last Mover Advantage

A great business is defined by its ability to generate cash flow in the future.
To properly value a business, you also have to discount those future cash flows to their present worth, since a given amount of money today is worth more than the same amount in the future.

Technology companies follow the opposite trajectory. They often lose money for the first few years: it takes time to build valuable things, and that means delayed revenue. Most of a tech company’s value will come at least 10 to 15 years in the future.

Most important question you should be asking: will this business still be around a decade from now?
Numbers alone won’t tell you the answer; instead you must think critically about the qualitative characteristics of your business.

Characteristic of Monopoly
Every monopoly is unique, but they usually share some combination of the following characteristics: proprietary technology, network effects, economies of scale, and branding.

(1) Proprietary technology
Most substantive advantage <- it makes your product difficult or impossible to replicate
Proprietary technology must be at least 10 times better than its closest substitute in some important dimension to lead to a real monopolistic advantage.
e.g. Google’s search algorithms
You can also make a 10x improvement through superior integrated design.
e.g. Apple’s iPad

(2) Network effects
Network effects make a product more useful as more people use it.
You’ll never reap them unless your product is valuable to its very first users when the network is necessarily small.
Paradoxically, network effects businesses must start with especially small markets.

(3) Economies of scale
A monopoly business gets stronger as it gets bigger <- the fixed costs of creating a product (engineering, management, office space) can be spread out over ever greater quantities of sales.
A good startup should have the potential for great scale built into its first design.

(4) Branding
A company has a monopoly on its own brand by definition, so creating a strong brand is a powerful way to claim a monopoly.
Beginning with brand rather than substance is dangerous.

Building a Monopoly
Start small and monopolize:
The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors. Any big market is a bad choice, and a big market already served by competing companies is even worse.
Scaling Up:
Once you create and dominate a niche market, then you should gradually expand into related and slightly boarder markets.
e.g. Amazon: Jeff Bezos’s founding vision was to dominate all of online retail, but he deliberately started with books. eBay: launched its auction marketplace for intense interest groups, like Beanie Baby obsessives.
The most successful companies make the core progression – to first dominate a specific niche and then scale to adjacent markets – a part of their founding narrative.
Don’t Disrupt
Originally, “disruption” was a term of art to describe how a firm can use new technology to introduce a low-end product at low prices, improve the product over time, and eventually overtake even the premium products offered by incumbent companies using older technology.
If you company can be summed up by its opposition to already existing firms, it can’t be completely new and it’s probably not going to become a monopoly.
As you craft a plan to expand to adjacent markets, don’t disrupt: avoid competition as much as possible.
e.g. PayPal took some business away from Visa. But since it expanded the market for payments overall, it gave Visa far more business than it took.

The Last Will be First
First mover advantage:
If you’re the first entrant into a market, you can capture significant market share while competitors scramble to get started. But moving first is a tactic, not a goal. What really matters is generating cash flows in the future.
Last mover advantage:
To make the last great development in a specific market and enjoy years or even decades of monopoly profits.
The way to do that is to dominate a small niche and scale up from there, toward your ambitious long-term vision.

【总结】一个好的商业取决于未来它能产生的现金流。一个技术型公司往往会有延迟的收益，因为初期需要投入进行产品开发，商业价值往往需要10-15年时间才能体现出来，所以前期虽亏损或盈利低但估值高。而实现价值之前，最重要的是需要思考它的商业特性。尽管每个垄断者都是不一样的，但它们也有些共性：有专有技术（比第二名好十倍以上）；有网络效应（从小市场开始组织规模）；有规模效应（网络产品较明显）；有品牌效应（品牌依附产品）。通常的创业流程是：找到一个利基市场，成为该市场的垄断者，获得垄断利润，再在邻接市场里进行规划扩张，这个扩张过程不要是破坏性的企图毁灭原有产业，应努力避免竞争出现，不断向愿景前进。


【6】You are Not a Lottery Ticket

Optimists welcome the future; pessimists fear it. Combining these possibilities yields four views:

(1) Indefinite Pessimism
An indefinite pessimist looks out onto a bleak future, but he has no idea what to do about it. E.g. Europe’s famous vacation mania

(2) Definite Pessimism
A definite pessimist believes the future can be known, but since it will be bleak, he must prepare for it. E.g. China

(3) Definite Optimism
To a definite optimist, the future will be better than the present if he plans and works to make it better. E.g. western world

(4) Indefinite Optimism
To an indefinite optimist, the future will be better, but he doesn’t know how exactly, so he won’t make any specific plans. He expects to profit from the future but sees no reason to design it concretely. E.g. U.S. since 1982
Instead of working for years to build a new product, indefinite optimists rearrange already-invented ones.

Our Indefinitely Optimistic World
Indefinite Finance
An indefinitely optimistic future calls for more bankers and lawyers.
Finance epitomizes indefinite thinking because it’s the only way to make money when you have no idea how to create wealth.

e.g. what happens when successful entrepreneurs sell their company.
The founders don’t know what to do with it, so they give it to a large bank. ->
The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors. ->
Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks. ->
Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats.

In an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end.

Indefinite Politics
Politicians have always been officially accountable to the public at election time, but today they are attuned to what the public thinks at every moment. -> Modern polling enables politicians to tailor their image to match preexisting public opinion exactly.
Past: The government used to be able to coordinate complex solutions to problems like atomic weaponry and lunar exploration.
Today: After 40 years of indefinite creep, the government mainly just provides insurance; our solutions to big problems are Medicare, Social Security, and a dizzying array of other transfer payment programs.

Indefinite Philosophy
Pessimistic & Definite: Plato, Aristotle
Pessimistic & Indefinite: Epicurus, Lucretius
Optimistic & Definite: Hegel, Marx
Optimistic & Indefinite: Nozick(left-liberal egalitarianism), Rawls(libertarian individualism) -> Both of them focuses on process

In philosophy, politics, and business, arguing over process has become a way to endlessly defer making concrete plans for a better future.

Indefinite Life
Today our society is permeated by the twin ideas that death is both in evitable and random. Meanwhile, probabilistic attitudes have come to shape the agenda of biology itself.

Biotech startups are an extreme example of indefinite thinking.

Is Indefinite Optimism even Possible?
Pessimistic & Definite: works by building what can be copied without expecting anything new
Pessimistic & Indefinite: works because it’s self-fulfilling
Optimistic & Definite: works when you build the future you envision
Optimistic & Indefinite: seems inherently unsustainable – how can the future get better if no one plans for it? Progress without planning is what we called “evolution”.

Darwinian (pseudo-Darwinian) Metaphors in Business:
“Digital Darwinism”, “Dotcom Darwinism”, and “Survival of the Clickiest”
Even in engineering-driven Silicon Valley, the buzzwords of the moment call for building a “lean startup” that can “adapt” and “evolve” to an ever-changing environment. Would-be entrepreneurs are told that nothing can be known in advance: we’re supposed to listen to what customers say they want, make nothing more than a “minimum viable product,” and iterate our way to success.
But leanness is a methodology, not a goal. Making small changes to things that already exist might lead you to a local maximum, but it won’t help you find the global maximum.
E.g. you can build the best version of an app that lets people order toilet paper from their iPhone. But iteration without a bold plan won’t take you from 0 to 1.
A company is the strangest place of all for an indefinite optimist: why should you expect your own business to succeed without a plan to make it happen? Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best.

The Return of Design
It’s true that every great entrepreneur is first and foremost a designer. (Designer of a business)
e.g. Apple imagined and executed definite multi-year plans to create new products and distribute them effectively. Forget “minimum viable products” –ever since he started Apple in 1976, Jobs saw that you can change the world through careful planning, not by listening to focus group feedback or copying other’s successes.
Long-term planning is often undervalued by our indefinite short-term world.

When a big company makes an offer to acquire a successful startup, it almost always offers too much or too little:
Too much – founders only sell when they have no more concrete visions for the company, in which case the acquirer probably overpaid
Too little – definite founders with robust plans don’t sell, which means the offer wasn’t high enough.

A business with a good definite plan will always be underrated in a world where people see the future as random.

You are not a Lottery Ticket
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. It begins by rejecting the unjust tyranny of Chance. You are not a lottery ticket.

【总结】乐观与悲观，确定性和不确定性，两两组合构成四种对未来的观点：未来悲观且不确定（欧洲：未来无望但不知如何做）、未来乐观且不确定（美国：未来会好的但不知道到底会如何）、未来悲观且确定（中国：未来已知，但由于它是无望的，应该努力准备）、未来乐观且确定（西方世界：未来会好的，如果好好规划努力）。美国从1982年起是对未来持有乐观但不确定的态度，这可以从金融、政治、哲学和人生这些领域的有影响力的人物和趋势看出，在不确定无规划的情况下要出现进步，这种情况是“进化”。因此，最近很多人将达尔文进化论引进商业领域。但一个创业公司不应该是无规划的，反而应该尽最大的努力进行规划，有一个非常好的确定的计划，而这样的计划在那些认为未来是随机的的人眼里往往是被低估了的。


【7】 Follow the Money

Pareto Principle / 80-20 rule
Monopoly businesses capture more value than millions of undifferentiated competitors.
The power law (so named because exponential equations describe severely unequal distributions) is the law of the universe.

In venture capital, where investors try to profit from exponential growth in early-stage companies, a few companies attain exponentially greater value than all others.

The Power Law of Venture Capital
Aim of Venture Capitalists:
Identify, fund, and profit from promising early-stage companies.

They raise money from institutions and wealthy people, pool it into a fund, and invest in technology companies that they believe will become more valuable. If they turn out to be right, they take a cut of the returns – usually 20%.
A venture fund makes money when the companies in its portfolio become more valuable and either go public or get bought by larger companies. Venture funds usually have a 10-year lifespan since it takes time for successful companies to grow and “exit”.
VCs hope the value of the fund will increase dramatically in a few years’ time, to break-even and beyond, when the successful portfolio companies hit their exponential growth spurts and start to scale.

Venture Returns:
Follow a power law
The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined.

Rule for VCs:
Only invest in companies that have the potential to return the value of the entire fund.
VCs must find the handful of companies that will successfully go from 0 to 1 and the n back them with every resource.
Every single company in a good venture portfolio must have the potential to succeed at vast scale.
e.g. at Founders Fund, we focus on five to seven companies in a fund, each of which we think could become a multibillion-dollar business based on its unique fundamentals.

Why People Don’t’ See the Power Law
Too often live in the present
Most of the differences that investors and entrepreneurs perceive everyday are between relative levels of success, not between exponential dominance and failure. And since nobody wants to give up on an investment, VCs usually spend even more time on the most problematic companies than they do on the most obviously successful.

What to do with the Power Law
Even the best venture investors have a portfolio, but investors who understand the power law make as few investments as possible. The kind of portfolio thinking embraced by both folk wisdom and financial convention, by contrast, regards diversified betting as a source of strength. The more you dabble, the more you are supposed to have hedge against the uncertainty of the future.

The power law means that differences between companies will dwarf the differences in roles inside companies.
One market will probably be better than all others (Chapter 5)
One distribution strategy usually dominates all others (Chapter 11)
Time and decision-making themselves follow a power law (Chapter 9)

【总结】风险资本的运作遵从宇宙的幂次定律，因此风险投资人应该投资给那些有潜力形成上亿规模的市场的公司，而不是平等的分散投资来分散风险。一般在投资组合中，成功的这样一个公司所产生的价值将等于或超出其余的所有总和。幂次定律使得公司与公司有巨大的悬殊，这样大的悬殊同样存在在公司内部不同的角色，公司的确定的不同市场，公司的不同的分销途径，公司的决策和时机把握上。

【8】Secrets
You can achieve difficult things, but you can’t achieve the impossible.
What valuable company is nobody building? Every correct answer is necessarily a secret: something important and unknown, something hard to do but doable.

Why aren’t People Looking for Secrets?
Ted Kaczynski: Human goals into three groups:
(1)(Easy) Goals that can be satisfied with minimum effort;
(2) (Hard) Goals that can be satisfied with serous effort;
(3) (Impossible) Goals that cannot be satisfied no matter how much effort one makes.

Why has so much of our society come to believe that there are no hard secrets left?
It might start with geography: There are no blank spaces left on the map anymore
Four social trends have conspired to root out belief in secrets:
(1) Incrementalism
(2) Risk aversion
(3) Complacency
(4) “Flatness” -> if it were possible to discover something new, wouldn’t someone from the faceless global talent pool of smarter and more creative people have found it already?
-> We have given up our sense of wonder at secrets left to be discovered.

The World according to Convention
To say that there are no secrets left today would mean that we live in a society with no hidden injustices.
In economics, disbelief in secrets leads to faith in efficient markets. But the existence of financial bubbles shows that markets can have extraordinary inefficiencies. (And the more people believe in efficiency, the bigger the bubbles get.)
Stop believing in secrets
e.g. HP
Tom Perkins ran the company’s research division -> the board should identify the most promising new technologies and then have HP build them
(But ->) Patricia Dunn, a banker by trade -> the board should restrict itself to a night watchman’s role: Was everything proper in the accounting department? Were people following all the rules?
(Results ->) Having abandoned the search for technological secrets, HP obsessed over gossip. By late 2012 HP was worth just $23 billion – not much more than it was worth in 1990, adjusting for inflation.

The Case for Secrets
You can’t find secrets without looking for them.
If you think something hard is impossible, you’ll never ever start trying to achieve it. Belief in secrets is an effective truth.
The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers.
Great companies can be built on open but unsuspected secrets about how the world works.

How to Find Secrets
Two kinds of secrets:
Secrets of nature – exist all around us; to find them, one must study some undiscovered aspect of the physical world -> what secrets is nature not telling?
Secrets about people – things that people don’t know about themselves or things they hide because they don’t want others to know. -> what secrets are people not telling?
Sometimes looking for natural secrets and looking for human secrets lead to the same truth.

What to do with Secrets?
Unless you have perfectly conventional beliefs, it’s rarely a good idea to tell everybody everything that you know.
Who do you tell?
Whoever you need to, and no more.
In practice, there’s always a golden mean between telling nobody and telling everybody – and that’s a company.
Every great business is built around a secret that’s hidden from the outside.
A great company is a conspiracy to change the world; when you share your secret, the recipient becomes a fellow conspirator.

【总结】公司的创建基于秘密，那些不易挖掘的秘密。人们不愿意挖掘这些秘密除了地理事实比如地球已经被探索得差不多了这样的自然性原因外，还有四个社会性趋势：增量思维，风险规避，自满自足，全球化后的他人寻找能力的假设。当公司停止搜寻秘密的时候，比如不去关注技术创新仅仅保持公司运转的惠普的市值就不断缩水。没有找到秘密的信念，就不会付出努力开始接近它。伟大的公司都建立在开放但一般人不会去怀疑的关于世界如何运作的秘密上。寻找的秘密有两种，一种是自然的秘密，一种是人的秘密，两种秘密最终的思考结果有时会殊途同归。当找寻到秘密后，不能告诉所有人也不能谁都不告诉，应该告诉任何应该知道的人，这些人组成了你的公司。任何一个成功的商业都建立在一个隐藏于外部的秘密上，所有知道秘密的人都是公司的同路人。


【9】Foundations

The startup messed up at its foundation cannot be fixed.
Bad decisions made early on – if you choose the wrong partners or hire the wrong people, for example – are very hard to correct after they are made.
As a founder, your first job is to get the first things right, because you cannot build a great company on a flawed foundation.
Founding Matrimony
The first and most crucial decision you make is whom to start it with.
Choosing a co-founder is like getting married, and founder conflict is just as ugly as divorce. Optimism abounds at the start of every relationship.
But if the founders develop irreconcilable differences, the company becomes the victim.
Technical abilities and complementary skill sets matter, but how well the founders know each other and how well they work together matter just as much. Founders should share a prehistory before they start a company together – otherwise they’re just rolling dice.

Ownership, Possession, and Control
Everyone in your company needs to work well together.
James Madison: men aren’t angels. That’s why executives who manage companies and directors who govern them have separate roles to play; it’s also why founders and investors’ claims on a company are formally defined. You need good people who get along, but you also need a structure to help keep everyone aligned for the long term.

Three concepts:
Ownership: who legally owns a company’s equity?
Possession: who actually runs the company on a day-to-day basis?
Control: who formally governs the company’s affairs?

A typical startup allocates ownership among founders, employees, and investors.
The managers and employees who operate the company enjoy possession.
A board of directors, usually comprising founders and investors, exercises control.

CEO of huge company
Own some of the company’s stock, but only a trivial portion of the total -> Incentivized to reward himself through the power of possession rather than the value of ownership -> create more value for all shareholders far in the future instead of focus on short-term performance

Early-stage startups
Founders usually have both ownership and possession.
Most conflicts in a startup erupt between ownership and control – between founders and investors on the board -> potential for conflict increases over time as interest diverge: a board member might want to take a company public as soon as possible to score a win for his venture firm, while the founders would prefer to stay private and grow the business.

In the boardroom, less is more. The smaller the board, the easier it is for the directors to communicate, to reach consensus, and to exercise effective oversight.
However, that very effectiveness means that a small board can forcefully oppose management in any conflict.

A board of three is ideal
Never exceed five people, unless your company is publicly held.
(Government regulations effectively mandate that public companies have larger boards – the average is nine members.)

On the Bus or Off the Bus
As a general rule, everyone you involve with your company should be involved full-time.
Break -> outside lawyers and accountants
Hiring consultants / part-time / working remotely ->misalignment
Should -> In the same place & everyday

Cash is not King
For people to be fully committed, they should be properly compensated.

CEO Payment
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.
In no case should a CEO of an early-stage, venture-backed startup receive more than $150,000 per year in salary.
High pay incentivizes him to defend the status quo along with his salary, not to work with everyone else to surface problems and fix them aggressively.
A cash-poor executive, by contrast, will focus on increasing the value of the company as a whole.
Low CEO pay also sets the standard for everyone else.
So long as that figure is still modest, it sets an effective ceiling on cash compensation.

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. A cash bonus is slightly better than a cash salary – at least it’s contingent on a job well done. But even so-called incentive pay encourages short-term thinking and value grabbing. Any kind of cash is more about the present than the future.

Vested interests
Startups don’t need to pay high salaries because they can offer something better: part ownership of the company itself.

Giving everyone equal shares is usually a mistake:
- Every individual has different talents and responsibilities as well as different opportunity costs, so equal amounts will seem arbitrary and unfair from the start.
- Granting different amounts up front is just as sure to seem unfair.
-> No ownership formula to perfectly avoid it
Early employees usually get the most equity because they take more risk, but some later employees might be even more crucial to a venture’s success.
Since it’s impossible to achieve perfect fairness when distributing ownership, founders would do well to keep the details secret.

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. Equity can’t create perfect incentives, but it’s the best way for a founder to keep everyone in the company broadly aligned.

Extending the Founding
The founding moment of a company, however, really does happen just once: only at the very start do you have the opportunity to set the rules that will align people toward the creation of value in the future.
The most valuable kind of company maintains an openness to invention that is most characteristic of beginnings -> it lasts as long as a company is creating new things, and it ends when creation stops.

【总结】公司的创建基础至关重要，其中的首要问题就与谁共建。首先是共同创始人，除了技术能力和互补技能，还需要能够足够了解彼此，分享以往的经历熟悉彼此。整个公司的人需要能够非常好的合作，需要有好的公司结构来构建人员的一致性。公司的人的角色分为三种：所有者、营运者、投资者。典型的创业公司，所有者为公司创建者、员工和投资者；营运者为管理者和员工；投资者通常为由公司创建者、投资人和执行人员组成的董事会。创业公司的矛盾容易发生在创建者和投资者之间，前者多期望公司私有长期发展，后者希望公司早日上市套现获利。公司的董事会理想为三人，最多不超过五人。公司的员工应为全职且每天在同一个地方工作，法律会计也许除外，但远程工作也应该尽量避免。公司应为努力工作的员工提供合理的补助，但现金总是基于现在而不是未来的，公司不需要提供高薪，公司可以提供公司股权，但如何公平的分配股权是一个很棘手没有范式的事，平分通常是错误的。相比现金收益更愿意获得公司股权的员工表达出了长期为公司努力以增加公司未来价值的意向，这也是将公司每一个人都能广泛的团结一致的最好的方法。公司初创期的规则将引导未来价值的创造，最有价值的公司有着始终对发明创新保持开放的特性，创新持续则公司持续，创新停止则公司而止。


【10】The Mechanics of Mafia

“Company culture” doesn’t exist apart from the company itself: no company has a culture; every company is a culture.
A startup is a team of people on a mission, and a good culture is just what that looks like on the inside.

Beyond Professionalism
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 themselves.

Recruiting Conspirators
Recruiting is a core competency for any company. It should never be outsourced.
Need people who will work together cohesively after they’re hired.

Why should someone join your company as its 20th engineer when she could go work at Google for more money and more prestige?
Two general kinds of good answers:
-Mission: why you mission is compelling -> why you’re doing something important that no one else is going to get done.
-Team: why your company is a unique match for him personally.

Of Cults and Consultants
Entrepreneurs should take culture of extreme dedication seriously.
Consultants (nihilism) ←----------0 to 1 ----------→ Cults (dogmatism)

The best startups might be considered slightly less extreme kinds of cults. The biggest difference is that cults tend to be fanatically wrong about something important. People at a successful startup are fanatically right about something those outside it have missed.

【总结】每一个公司就是一种文化。公司的员工应该切实热爱一起工作，不仅有才能，更能够对具体的工作保持兴奋。招聘是公司的核心能力，不能外包。除了早期员工高额股权和引人注目的责任任职岗位，吸引后来员工可以通过两方面：一是公司使命：为什么在做的事情是重要且别人无法做到的？一是团队：为什么公司与其个人是匹配的？从外部来看，公司的每个人应该是具有相似性的，他们都为公司使命服务；从内部来看，公司的每个人应该是完全不一样的，因此需要消除内部竞争而让员工之间建立长久的关系。最好的公司应该是一种非极端的教派文化，一个成功的创业公司是员工都狂热而正确地拥护外界错过地某种信仰。


【11】If You Build It, Will They Come?

We underestimate the importance of distribution – a catchall term for everything it takes to sell a product.
The Field of Dreams conceit is especially popular in Silicon Valley, where engineers are biased toward building cool staff rather than selling it. But customers will not come just because you build it.

Sales is Hidden
All salesmen are actors: their priority is persuasion, not sincerity.
Sales works best when hidden -> why almost everyone whose job involves distribution – whether they’re in sales, marketing, or advertising – has a job title that has nothing to do with those things.
The most fundamental reason that even businesspeople underestimate the importance of sales is the systematic effort to hide it at every level of every field in a world secretly driven by it.
It’s better to think of distribution as something essential to the design of your product. If you’ve invented something new about you haven’t invented an effective way to sell it, you have a bad business – no matter how good the product.

How to Sell a Product?
Superior sales and distribution by itself can create a monopoly, even with no product differentiation.
No matter how strong your product – even if it easily fits into already established habits and anybody who tries it likes it immediately – you must still support it with a strong distribution plan.

Two metrics set the limits for effective distribution:
CLV (Customer Lifetime Value): The total net profit that you earn on average over the course of your relationship with a customer
CAC (Customer Acquisition Cost): CLV must exceed the amount you spend on average to acquire a new customer.

In general, the higher the price of your product, the more you have to spend to make a sale – and the more it makes sense to spend it.

Complex Sales
Average – 7 figures or more
Every detail of every deal requires close personal attention
It might take months to develop the right relationships
You might make a sale only once every year or two
You’ll usually have to follow up during installation and service the product long after the deal is done.

Complex sales works best when you don’t have “salesmen” at all.
At that price point, buyers want to talk to the CEO, not the VP of Sales.

Good enterprise sales strategy starts small, as it must: a new customer might agree to become your biggest customer, but they’ll rarely be comfortable signing a deal completely out of scale with what you’ve sold before.
Once you have a pool of reference customers who are successfully using your product, then you can begin the long and methodical work of hustling toward ever bigger deals.

Personal Sales
Most sales –> Average deal sizes might range between $10,000 and $100,000
The challenge here isn’t about how to make any particular sale, but how to establish a process by which a sales team of modest size can move the product to a wide audience.

Sometimes the product itself is a kind of distribution <- adding key partners in the network to generate values for customers

Distribution Doldrums
In between personal sales (salespeople obviously required) and traditional advertising (no sales people required) there is a dead zone.
e.g. a software service for store owners
Advertising – too broad or too inefficient
Personal sales effort – no resources at that price point
-> Distribution is the hidden bottleneck

Marketing and Advertising
Work for relatively low-priced products that have mass appeal but lack any method of viral distribution.

Works for startups only when your customer acquisition costs and customer lifetime value make every other distribution channel uneconomical.

Startups should resist the temptation to compete with bigger companies in the endless contest to put on the most memorable TV spots or the most elaborate PR stunts.
No early-stage startup can match big companies’ advertising budgets.

Viral Marketing
A product is viral if its core functionality encourages users to invite their friends to become users too.
The ideal viral loop should be as quick and frictionless as possible.
e.g. PayPal
Initial user base: 24 people who worked at PayPal
By directly paying people to sign up and then paying them more to refer friends, we achieved extraordinary growth. This strategy cost us $20 per customer, but it also led to 7% daily growth, which meant that our user base nearly doubled every 10 days.

Whoever is first to dominate the most important segment of a market with viral potential will be the last mover in the whole market.
Not acquire more users at random -> get the most valuable users first

The Power Law of Distribution
If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.

Selling to Non-Customers
Selling your company to the media is a necessary part of selling it to everyone else.
You should never assume that people will admire your company without a public relations strategy
The press can help attract investors and employees
What he finds or doesn’t find when he googles you will be critical to the success of your company.

Everybody Sells
Everybody has a product to sell – no matter whether you’re an employee, a founder, or an investor.
Look around. If you don’t see any salespeople, you’re the salesperson.

【总结】销售至关重要，好的产品没有销售也无法生存。销售人员的首要工作是说服而非诚意，好的销售是隐藏不觉的销售。用户终生价值（CLV）应当超越用户撷取成本(CAC)，基本上产品价值越高，所需要花费的销售成本也越高。在做复杂销售（$100,000）时，买家希望直接和CEO交涉，一般这样的销售一年只有几次，但需要几月的跟踪和对所有细节的把握。在做个人销售（$10,000 - $100,000）需要建立一个销售流程。在个人销售和传统广告这两个类别之间有一个死区，这时候传统广告过于发散而无效而个人销售又无力承担。传统广告可以服务于大众产品，对于创业公司而言只用于其他销售渠道都走不通的时候。创业公司需要避免和大公司打广告战。病毒营销则需要产品属性有邀请朋友成为用户的特性。在重要的细分市场能够打造出病毒传播潜力的公司将是整个市场的最后赢家。销售也遵循幂次定律，在一个销售渠道上形成指数增长就成功了。但初创企业也都需要公共关系策略并且每一个人都需要成为销售。


【12】 Man and Machines

The computers are complements for humans, not substitutes.
The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.

Globalization means substitution
Technology means complementarity

People VS Machines –> categorically different
People: form plans and make decisions in complicated situations / less good at making sense of enormous amounts of data
Computers: excel at efficient data processing, but they struggle to make basic judgments that would be simple for any human.

Complementary Business
Complementarity between computers and humans isn’t just a macro-scale fact. It’s also the path to building a great business.
Advanced software made this possible, but even more important were the human analysts, prosecutors, scientists, and financial professionals without whose active engagement the software would have been useless.
e.g. Palantir – fraud detection
Linkedin – recruiting

The Ideology of Computer Science
Machine Learning
e.g. Google Translate --extracted patterns through statistical analysis of a huge corpus of text
Big Data
Is usually dumb data.
Computers can find patterns that elude humans, but they don’t know how to compare patterns from different sources or how to interpret complex behaviors. Actionable insights can only come from a human analyst.

As we find new ways to use computers, they won’t just get better at the kinds of things people already do; they’ll help us to do what was previously unimaginable.

【总结】人和机器的关系应该是互补的而不是替代性，这是基于两者的类型差异。而这种互补是有商业价值的，比如Palantir利用计算机来检测可以诈骗然后由专业人员来进行人工判断，比如Linkedin提供人员的信息数据但公司的人自行进行招聘相关决策等。计算机科学盛传的“机器学习”和“大数据”确实能让机器做模式识别，但机器来比较模式和解释复杂行为上不及真正的分析人员。


【13】Seeing Green

Case Study: Clean technology

1 The Engineering Question
   Can you create breakthrough technology instead of incremental improvements?
2 The Timing Question
   Is now the right time to start your particular business?
3 The Monopoly Question
   Are you starting with a big share of a small market?
4 The People Question
   Do you have the right team?
5 The Distribution Question
   Do you have a way to not just create but deliver your product?
6 The Durability Question
   Will your market position be defensible 10 and 20 years into the future?
7 The Secret Question
   Have you identified a unique opportunity that others don’t see?

Tesla: 7 for 7
1 The Engineering Question
   Good tech -> Other car companies rely on it (e.g. Daimler uses battery packs, Mercedes-Benz uses a Tesla powertrain, Toyota uses a Tesla motor)
   Elegantly designed -> High customer rating
2 The Timing Question
   Government would continue to support clean tech -> secured a $465 loan from the U.S. Department of Energy
3 The Monopoly Question
   Start: the market for high-end electric sports cars
4 The People Question
   CEO: the consummate engineer and salesman -> assembled a team that’s very good at both.
5 The Distribution Question
   Decided to own the entire distribution chain -> sell and service its vehicles in its own stores -> up-front cost but control over the customer experience, strengthen Tesla’s brand, and save the company money in the long run (others: beholden to independent dealerships)
6 The Durability Question
   Head start & moving faster than anyone -> widen in the years ahead (The founder is still in charge)
7 The Secret Question
   Fashion drove interest in cleantech -> Rich people especially wanted to appear “green”
Secret: cleantech was even more of a social phenomenon than an environmental imperative

The Myth of Social Entrepreneurship
Social entrepreneurs aim to combine the best of both worlds and “do well by doing good.” Usually they end up doing neither.
Doing something different is what’s truly good for society – and it’s also what allows a business to profit by monopolizing a new market.
The best projects are likely to be overlooked, not trumpeted by a crowd; the best problems to work on are often the ones nobody else even tries to solve.

【总结】以绿色能源领域为例，分析了创业最重要的七个问题，并且阐述了实际中的创业公司用行动所作出的回答，阐述了缺失相关条件所带来的失败和Tesla如何成功。这七个问题是：（1）工程问题：是否有突破性技术而不仅仅是增量性改变？（2）时机问题：这在是开展这项事业的合适时机吗？（3）垄断问题：是否能在大市场中占据某个小的细分市场？（4）人员问题：是否有合适的团队？（5）营销问题：是否出了开发产品还有产品营销渠道？（6）持续性问题：市场地位能否在未来十到二十年无懈可击？（7）秘密问题：是否发掘的是一个他人不曾识别出的秘密机会？关于公益创业，其目的是结合做事做得好和对社会有益，其竞争是和纯商业竞争类似的，它依旧需要能够通过垄断新市场获得利益，但是通过做对社会有益但又不同于以往和他人的事实现。


【14】The Founder’s Paradox

Almost all successful entrepreneurs are simultaneously insiders and outsiders.
When they do succeed -> attract both fame & infamy -> served as vessels for public sentiment
Founders’ traits appear to follow an inverse normal distribution <- nature/nurture / not as extreme as they appear
Loop: -> actually different -> develop extreme traits -> they exaggerate -> others exaggerate -> (actually different)
We alternately worship and despise technology founders just as we do celebrities.
A unique founder can make authoritative decisions, inspire strong personal loyalty, and plan ahead for decades.

The lesson for business is that we need founders. If anything, we should be more tolerant of founders who seem strange or extreme; we need unusual individuals to lead companies beyond mere incrementalism.

A great founder can bring out the best work from everybody at his company.
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.

【总结】创始人和名人一样具有两面性，成功的他们会获得好和恶劣的极端名声。他们似乎与众不同，有很多极端的特点，这样的认识是基于他们本身、环境以及夸大的评价效应，所以对于创始人应该有更大的容忍度，因为一个公司需要奇怪或者极端的创始人，这样的人通常能够引领公司超越一般的增量性成长。好的创始人能够做出权威的决策，激发强烈的个人忠诚度，并且为几十年的未来做规划。一个好的创始人能够让公司的每一个人拿出最好的工作水平，但创始人最重要的危机是过于自大，这也是任何一个公司会失去对错误觉醒的智慧的危机所在。


【Conclusion】Stagnation or Singularity?

Nick Bostrom: four possible patterns for the future of humanity
(1) Recurrent collapse: a never-ending alternation between prosperity and ruin
(2) Plateau: converge toward a plateau of development -> the future will look a lot like the present
(3) Extinction: whether a larger-scale social disaster could be contained were it to occur -> a collapse so devastating that we won’t survive it
(4) Takeoff: accelerating takeoff toward a much better future

Without new technology to relieve competitive pressures, stagnation is likely to erupt into conflict. In case of conflict on a global scale, stagnation collapses into extinction.

Singularity
Ray Kurzweil: Singularitarian
Starts from Moore’s law and traces exponential growth trends in dozens of fields, confidently projecting a future of superhuman artificial intelligence
“the Singularity is near”

Our task today is to find singular ways to create the new things that will make the future not just different, but better – to go from 0 to 1.

The essential first step is to think for yourself. Only by seeing our world anew, as fresh and strange as it was to the ancients who saw it first, can we both re-create it and preserve it for the future.

【总结】根据Nick Bostrom的看法，人类未来有四种形式：（1）兴衰交替（2）渐入平稳（3）走向灭亡（4）加速起飞。知识基础文明如今如此普遍，使得未来完全走向灭亡的可能性大于长时间黑暗后可以复苏。灭亡且不论，在未来人们预期有更广泛的全球化和趋同化，这样竞争会进一步加强，如果没有新的技术来缓解竞争，停滞不前将激发冲突。因此，未来我们需要通过技术突破来创造更好的未来，这个技术突破点再Ray Kurzweil的理论中成为“奇点”，我们处在“奇点迫近”的时期。我们今天的任务就是寻找“奇点”来创造新的新的事物以让未来变得更好，实现从0到1的质变。