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zerotoone11Competition is an epidemic and your college degree is worthless. At least, that’s the opinion of controversial entrepreneur Peter Thiel. The billionaire co-founder of PayPal and famous first investor in Facebook is never afraid to challenge the dogmas of our time.

In his new book Zero to One, Thiel offers a blueprint for startups on how to build the future.

Forget everything you’ve learned in business school and rethink your assumptions.

We’re taught from day one that competition is the cornerstone of capitalism. That progress is a byproduct of businesses dueling it out in the economic arena. But Thiel claims otherwise:

“Competition is the ideology that pervades our society and distorts our thinking. We preach competition, internalize its necessity, and enact its commandments; and as a result, we trap ourselves within it – even though the more we compete, the less we gain.”

Contrary to what we’re taught to believe, competition is an impediment to innovation. Companies become so caught up in keeping pace with each other that they ultimately lose sight of what matters. Instead of trapping ourselves in perpetual rivalries, Thiel argues, let’s strive to build creative monopolies.

For all intents and purposes, Google is a monopoly. Their dominance in the search engine market has allowed them the opportunity to expand into everything from self-driving cars to robotics to smart home technologies. Monopolies, according to Thiel, can afford to turn their attention to things other than money because they’re not as focused on the short-term struggle of competition.

In order to grasp what truly constitutes progress, we must call into question conventional beliefs. Competition is harmful because competition is imitation. Imitation is counterproductive to progress because it doesn’t involve innovative thinking. Thiel encourages companies to take society from Zero to One, making vertical progress rather than horizontal, explaining how:

“If you take one typewriter and build 100, you have made horizontal progress. If you have a typewriter and build a word processor, you have made vertical progress.”

Peter Thiel
Peter Thiel

The next Mark Zuckerberg won’t make Facebook, and the next Steve Jobs isn’t working on another Apple. Real innovation occurs when we make a conscious effort to go against the natural human inclination to emulate everything we encounter in our environment.

What does it say about our society to find that many of the most successful innovators in Silicon Valley suffer from a mild form of Asperger’s? According to Thiel, this suggests that the inability to fully ascribe to society’s norms and expectations can have its benefits. Only by rejecting our predisposition towards conformity can we hope to create anything genuinely original to help move the world forward.

Aside from critiquing our fundamental economic principles, Peter Thiel has another bone to pick. The ‘Lean Startup’ movement, he argues, is inherently flawed.

In Zero to One, Thiel writes:

“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. Iteration without a bold plan won’t take you from zero to one.”

In order to grasp the crux of this argument, one must take a step back and understand the context. Engineer and entrepreneur Eric Ries wrote The Lean Startup in 2011 because he was frustrated with the traditional approach to developing a company. Ries argued that untested assumptions were to blame for the overwhelming percentage of businesses failing. Rather than guess what consumers want, entrepreneurs should release new products in small, incremental stages in order to gain feedback and pivot the company’s vision when necessary. Essentially, the Lean Startup is about applying Scientific Method principles to startup strategy.

Thiel doesn’t dispute that pivoting is a vital tactic for many prosperous companies. PayPal started off on Palm Pilots, and Facebook was originally a college version of ‘Hot or Not’. However, it is this idea of beginning a business with pivoting in mind that is the problem. If you lack a grand vision and constantly adapt to consumer feedback, then you’re not guided by any overarching goals.

Instead of obsessing over short-term metrics and immediate results, we must set our sights on the big picture. Thiel urges startups to build something durable and scalable. Invest more effort into developing the foundation of your company, and make sure that you’re prepared for growth when the time comes.

A difficult question that Thiel often asks aspiring entrepreneurs is “what valuable company is nobody building?” This forces us to identify a problem that others aren’t actively working to solve. It’s not an easy thing to answer, but it’s a question that not enough people are asking themselves.

For anyone interested in startups or working on new ideas, Zero to One is a must-read.

Each chapter is packed with valuable insights that will force you to think critically and reevaluate your approach to creating a business.

The most important message to take away from Thiel’s teachings is this: Think for yourself. Don’t get caught up in culture or movements or society’s expectations of how you should act. Every great innovation in history happened when individuals boldly challenged the status quo and revealed a different path for humanity.

Coming up on Friday: GeekWire editors pick their favorite geeky books for the holidays.

Tim Finnigan is an avid reader of all things startup. He’s also the founder of Seattle-based Blockshelf, where he’s chronicling lessons from all of the startup books he’s read. 

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