Top positive review
Step Change Innovation for Startups
8 July 2018
In business, we don’t get the panacea methodology to deliver a market-dominating business or monopoly, and the methodology for the next big thing likely hasn’t been defined yet. We need to look at each business from multiple perspectives and I do believe Peter Thiel provides another unique perspective – not a replacement perspective but an additional one. The research shows that disruptive innovation typically comes from new start companies and they tend to dominate a new market niche until they grow dramatically or are acquired. Iterative innovation in specific markets tends to be dominated by the incumbents, which are usually large multinational companies if the market is lucrative. So I agree with Peter Thiel, that new start businesses need to consider an order of magnitude value step change over existing solutions, to succeed, which is the zero to one transformation.
"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 0 to 1. The act of creation is singular, as in the moment of creation, and the result is something fresh and strange."
Zero to One suggests a very different method from the lean-agile approach proposed by Steve Blank and Eric Ries in The Four Steps to the Epiphany and The Lean Startup respectively. They suggest that Customer Discovery, Validation, Creation and Building are the cornerstones of the startup approach.
I believe we need to start with a vision of what a successful business would look like, and we need to see that it will be significantly different (10x) from existing competitive solutions. How do we get there? By understanding and executing a market entry path that is iteratively to build, test & learn. I would also question Thiel’s suggestion that only technology enables that step change. In the cited case of Facebook, there were multiple solutions offering social media platforms and it appears the leadership and marketing of Facebook, were more the decisive factors. We could even argue that Facebook is an example of the Eric Ries approach.
The example of Paypal and Thiel’s insights into the economy and the investment community around the DotCom boom and bust were very interesting. The investor expectations are a constant challenge as I’ve heard from one investor that he wouldn’t get out of bed if a company wasn’t turning over €40million in 3 years and another saying if you showed me figures like that I’d think I was working with idiots with their heads in the clouds.
After the main point of vertical innovation is made, the book rambles and while the discussion points are interesting you often wonder what this has that to do with the main premise of the book. The book does feel a little unstructured and elements seem to be included as they were part of a lecture series rather than an integral part of a framework for achieving that 0 to 1 impact.
I would recommend reading this book as it may encourage and inspire you to consider where you want to go with the company and its core solutions. It does, however, need to be tempered with the knowledge that other approaches exist and Peter Thiel may be wrong, at least in parts.