#424 Peter Thiel on How to Build a Creative Monopoly

**SPEAKER_1** (0:00)
It's true that every great entrepreneur is first and foremost a designer. Anyone who's held an iPhone or a MacBook has felt the result of Steve Jobs' obsession with visual and experiential perfection. But the most important lesson to learn from Jobs has nothing to do with aesthetics. The greatest thing Jobs designed was his business. Apple imagined and executed definitive 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 groups or copying other people's success.
This is one of my favorite sentences in this entire section. Long-term planning is often undervalued by our indefinite short-term world. When the first iPod was released in October 2001, industry analysts couldn't see much more than, quote, a nice feature for Macintosh users that doesn't make any difference to the rest of the world.
Jobs planned the iPod to be the first of a new generation of portable post PC devices, but that secret was invisible to most people.
One look at the company's stock chart since then shows the harvest of this multi-year plan. The power of planning explains the difficulty of valuing private companies. When a big company makes an offer to acquire a successful startup, it almost always offers too much or too little.
Founders only sell when they have no more concrete visions for the company. Definitive founders with robust plans don't sell.
When Yahoo offered to buy Facebook for a billion dollars in July 2006, I thought we should at least consider it.
But Mark Zuckerberg walked into the board meeting and announced, okay guys, this is just a formality. It shouldn't take more than 10 minutes. We're obviously not going to sell here.
Mark saw where he could take the company and Yahoo didn't. A business with a good definitive plan will always be underrated in a world where people see the future as random.
A startup is the largest endeavor over which you can have definitive 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.
Okay, that is an excerpt from the book that I'm going to talk to you about today, which is Zero to One, Notes on Startups are How to Build the Future, and it's written by Peter Thiel and Blake Masters. So I was actually shocked. I think this is probably the only business book, maybe the only business book worth reading, and I was actually shocked that it's been four years since I read it. I think I've read this three or four times by now.
But what I wanted to do this time is I didn't want to be influenced since it's been four years since I read it. And since then, I probably read, I don't know what, 200 more biographies of history's greatest entrepreneurs. I didn't want to be influenced by any notes or highlights I left in the previous copies of the book. So I bought a new copy of the book and went through it brand new.
And really, what I want to talk to you about today, which I think is really one of the most interesting things, is the way I think about this book now, it doesn't really tell you what to do. It's more like a prompt for your own thinking. But I think the main message that Peter is trying to get across is you should be focused on trying to build a creative monopoly. And so I'm going to go to that idea over and over again. I think Apple is one of the best examples. So I started our conversation today with Apple. I'm going to end our conversation today with Apple. I think the preface of this book is a good outline on what we should try to be doing as founders. And that's really a line from one of my heroes, Edwin Land, founder of Polaroid, which his personal motto was, don't do anything someone else can do. And you hear Peter Thiel echo that sentiment in the very first lines of the book where he says, every moment in business happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin will make a search engine. And the next Mark Zuckerberg won't create a social network. If you are copying these guys, you aren't learning from them.
The act of creation is singular as is the moment of creation. And the result is something fresh and strange. Unless, and he's talking about American businesses here, but this really applies to every business in the world. Unless they invest in the difficult task of creating new things, American companies will fail in the future no matter how big their profits remain today. Today's best practices lead to dead ends. The best paths are new and untried. If American business is going to succeed, we're going to need hundreds or even thousands of miracles. And I love, I forgot the section when I read it previously. And I love his definition of miracles. This would be depressing, but for one crucial fact, humans are distinguished from other species by our ability to work miracles. We call these miracles technology. And then he has, in my opinion, the best definition of technology and the one I've been using for several years. I just got from this book, gets into that in one moment. It says, technology is miraculous because it allows us to do more with less, ratcheting up our fundamental capabilities to a higher level. By creating new technologies, we rewrite the plan of the world. It's easy to forget in a world where so much of what we do is repeat what has been done before. Zero to One is about how to build companies that create new things. And I absolutely love this. It says, this book offers no formula for success. The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist, because every innovation is new and unique. No authority can prescribe in concrete terms how to be innovative. This is what I mean about this book is really best used and best thought of as a prompt for your own thinking. Indeed, it's also funny to me, because something I've told you over and over again that we forget, that we forget, and people are always like, why'd you read James Dyson's first autobiography five times? Well, I was like, well, I've actually read it way more than that. I've read it five times all the way through, and I've read highlights on that book hundreds of times. And I actually got to meet James Dyson for my other show and got to sit down and record a conversation with him for two straight hours. So it's like, how many times have I really read the book? Way more than five. But the reason I bring that up is because even though I haven't read this book in four years, there's certain lines that just stick in your thinking. And this is one of them. This is one of the most important lines in the book. So he says, indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas. So I read that line, I think about this book, but I think about almost every single person you and I have talked about on Founders. Obviously, James Dyson being a great example, Steve Jobs, where Peter was just saying the greatest thing that Steve ever designed was his actual business. Edwin Land, all of these people thought about business from first principles. And then when I got to this section where he's like, hey, you know, this book offers no form of success. The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist. It's the idea that what this book gives you is some questions to ask yourself.