Peter Theil in his book ‘ZERO to One’ has given descriptive pathways on every aspect of entrepreneurship. The author is a German-American billionaire entrepreneur and a co-founder of Pay-Pal and various other successful businesses.
In this book, the author suggests starting a business that is new in the market and the first of its kind. Doing what we already know how to do, takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from ‘Zero to 1’, and that’s how the book is named. “Creating something new is absolutely difficult, but not impossible”, says the author. One needs to find a problem, and a business should be erected by focusing on solving that problem. Similarly, a business can be focused on fulfilling a ‘need’ as well. There is a simple problem that we face every day ie. not able to find a cab or an autorickshaw easily. Bhavish Agarwal focused on solving this problem and started a business that each one of us is familiar with ie. OLA. Now people can easily book cabs/auto rikshaws through their mobile phones and can also get ‘pick-up’ service right outside their building/colony.
The writer further shares insights into his entrepreneurial journey. It was in the 1990s when the US was undergoing a recession. Unemployment was proliferating. Commercial use of the internet was allowed in 1992 and the ‘Mosaic browser’ was officially released in Nov 1993. With the advent of a search engine, people started seeing a prospective online business opportunity. Subsequently, there was a ‘Dot Com’ boom. Many startups were emerging in the US, precisely in Silicon Valley. There was exuberance all over. Some people started having 5-6 startups at a time. Pay Pal was a startup that provided a service of sending money through email. Initially, they did not get much of the anticipated response and audience. So, the team came up with an excellent scheme which proved to be very effective. They gave customers $10 for joining and $10 more every time they referred a friend. They gained thousands and thousands of new customers and an exponential growth rate. But this scheme wasn’t financially viable as they gave out money for getting customers. But seeing such exponential growth within a short span, they received a lot of funding later.
The author, further, suggests that one should not start a business related to a market that already has a lot of competition. For example, launching a new biscuit brand wouldn’t be a good idea because there already exist many biscuit brands and people are very familiar with them. So, why would they abandon other brands and buy yours? Rather, a lot of revenue has to be spent on marketing. On the other hand, by creating a monopoly, your customers do not have many choices and will continue to be your customers. Besides, a considerable part of your revenue can be spent on research and development, which would’ve rather been spent on marketing had we entered into a competitive market. You can update and develop your product from time to time which would help you gaining customer loyalty, just as Google does. Most people use Google despite there being many other search engines. They constantly upgrade their functions, bring in new features, etc.
Further, the author has emphasized the need to use technology. Amazon, when launched, claimed to be ‘Earth’s largest bookstore’. Amazon didn’t need to physically store any books. It only requested the title from its supplier whenever a customer made an order. To create a monopoly, your product/service should be 10 times better than your immediate competition. The author has profoundly highlighted the need for innovation and has quoted, “Always invent-Never stop”. Nokia was a successful brand, but since it did not cater to the developing times, it has completely vanished from the market.
While highlighting few aspects of Human Resource Management, the author has suggested that hire employees who are not just talented but will enjoy working with you. While hiring, sell mission and not perks. Paying salaries, in the initial stages would not be viable and would be difficult. Instead, you can give a stake (share) of your company to them. The initial employees of your startup are very important and giving them a stake in your company would make them feel like being the owner and would put in more effort.
Similarly, the author has excellently talked about every aspect of starting a startup and further scaling it. Hence, I awfully suggest you to read this book and start your journey to become a successful entrepreneur.