From the Desk of Loy Machedo: Loy Machedo’s Controversial Book Review – Zero To One by Peter Thiel
When I young, I committed a grave sin.
I actually had the audacity to argue with a Priest who had dedicated his life God and had to spend nearly 30 years studying the Bible, dedicating his life to God and living a truly pious life. Eating, sleeping, breathing – he had only one – just one goal in life – to understand Jesus Christ even more.
So when I, a 14-year-old brat, who hardly read the Children’s Illustrated Bible (which had cartoons depictions to make reading easier) stated with his teenage like ignorance – ‘What if you are wrong?” – the look on his face was neither funny nor amusing.
I could see the blood not just drain from his face but a new color of anger light up his face as if he was going to explode.
Before I could become another statistic in the ‘murdered by the clergy’ genre, I was quickly whisked away by my friends and taken far away from the exploding religious volcano.
I was severely reprimanded at home for committing such a grave sin and was asked to apologize profusely to the angels, the archangels, the saints, the Holy Spirt, Mother Mary, Jesus and yes – the Bejesus Priest.
However, fast forward 30 years hence, given that I have become a Skeptic Atheist, today, I can tell you without a fragment of a doubt – that this Priest is right in knowing – the wrong things. Because today I know for a fact that religion is man made. (how and why – lets get to it in some other article) and that priest – even with all the good intentions – was an expert in a man-made religion of great story-telling episodes of the ancient past. More like having a Ph.D. in the epistemology of The Smurfs and why they are blue.
And that is kind of how I feel with Peter Thiel and his book.
Now given that Peter Thiel is
1. American entrepreneur
2. venture capitalist
4. political activist, and
5. author who was ranked No. 4 on the Forbes Midas List of 2014,
6. with a net worth of $2.2 billion,
7. and No. 246 on the Forbes 400 in 2016,
8. with a net worth of $2.7 billion
Am I seriously worthy enough to talk and comment about this man?
It’s like asking me to speak about Facebook to Mark Zuckerberg.
However, keeping all his credentials, achievements and success aside, I will arrogantly do the unpardonable sin of trying to put forward my 2 cents and prove – he ‘maybe’ wrong – both in his book and in his writing skills.
Loy Machedo’s Controversial Book Review – Zero To One by Peter Thiel
What did I get from this book:
1. Peter Thiel believes that you should create new businesses i.e. going from Zero to One rather than copying other businesses
2. To succeed in business, you need to build, create and maintain a monopoly.
3. Capitalism and Competition are opposites. Capitalism is all about generating profits. Competition eliminates profits.
4. Monopolies get high profits to invest in the future and help in future investments. Competition eliminates this possibility
5. Success is not a matter of luck
6. Educational System makes you average at everything and good at nothing
7. Getting focused early on helps you develop stand out skills
8. How to build a monopoly? Develop a zero-to-one offering and then scale up
9. Avoid Global Domination
10. Key to success – avoid competition at all cost
11. A Monopoly is not worth much if it cannot be protected
12. To save a monopoly – Network Effects, Economies of Scale & Branding
13. Network Effects – Address the value of your offering, the more users you have, the greater the value to each user (Facebook, Paypal)
14. Economies of Scale address your production costs. The larger your volume, the lower your production costs.
15. Branding raises awareness
16. Globalization is doomed without Technological Innovation
17. Focus on Specific Skills
18. A Bad Plan is better than No plan
However, even though you can argue on both sides for and against his theories, I will point at only one area which I disagree on.
“Monopolies are Good”
I think Peter Theil needs to visit the UAE where Etisalat and DU are the monopolies where the telecommunications industry is concerned. Under their monopolistic rule, Skype, Whatsapp, Facebook Video and a whole host of other services are banned.
Because they want to ensure you only use their overly-priced services.
And if Peter Theil was to visit UAE when DU (the company under Sheikh Mohammed which was launched in Dubai, UAE to compete with Etisalat – which belonged to the UAE government of all the 7 Emirates) – he would call it absolutely unacceptable business practices.
These two companies leave the people in the UAE (80% expats) with no choice other than to use their services – and if it is not done (or alternative sources are used) it is a criminal offense.
So what would Peter have to say to this Monopolistic Tendency?
And when Etisalat was the monopoly – they didn’t bother to give customers any new facilities, any new packages or any discounts. In fact, their customer’s service record was by far the worst. All of a sudden when DU arrived on the scene giving customers better options, offers, and services – Etisalat woke up and started improving its game.
So on what basis does Theil make the claim that ‘Monopolies are good?’
His assumptions would be good only if the monopoly had all its values in place and sought to do good for mankind – which according to me – as long as you have the money pouring in from all sides – the last thing you think about is being generous.
According to me when there is competition even in the simplest of things like the free services example browsers Chrome versus Safari versus Firefox – the ones that offer the most services, that ones that really innovate and take care of the customer with more benefits are the ones that survive. The ones that don’t care – well, disappear. Which is why it is important for competition to be present. If competition is not present – the customer will not be taken care of.
And let’s not forget when companies were feeling comfortable
Intel gave us the messed-up Pentium
Steve Jobs gave us the Newton
Ford gave us the Edsel
Coke gave us New Coke
So is monopoly good for people or for a company alone?
Moment of Truth
The founders of PayPal – Elon Musk, Max Levchin, Luke Nosek, Ken Howery, Yu Pan & Peter Thiel are rare individuals who changed the way we do business and live our lives. And each one of them went ahead to build even more greater business ventures and empires. Even though Peter Thiel’s writing skills are not the greatest – his words of wisdom are worth listening to because he has proved his mettle.
So would I recommend the book?
Not actually, No.
The reason – what he stated could have been stated better in a much more readable and interesting manner. There were many times I struggled to read the book and given that I have a very low attention span – it proved challenging. But the advice that he has stated is something powerful – yet not at all easy. And something which I feel only .00001% of the world’s population can do.
Having said that – I would suggest you check out a few Book Review of Peter Thiel instead of buying his book because over there I feel you can understand what he wants to say more clearly.
Overall rating – 6 out of 10