Zero to One: Notes on Startups, or How to Build the Future

In business, competition is when companies try to outsell each other with similar products. Economists, politicians, and thought leaders tend to agree that competition is good for society, but according to Thiel, the costs of competing, and the converging sameness of the products, means there are “no profits for anybody, no meaningful differentiation, and a struggle for survival” (36). Such battles can improve products but only incrementally, because no one involved can afford the time and expense of developing truly new and innovative solutions for customers.

Thiel believes the cure for this is to avoid competing and focus on making products that are so good, they dominate their markets and provide big profits for their companies. Those profits are reinvested into development, leading to consistent creative growth.

Thiel uses the term monopoly in a specific way. A monopoly is a person or group, usually a business, which faces little or no competition in its market. This can happen in different ways, but Thiel specifically rules out “illegal bullies or government favorites” (25), the types that most people imagine when they think of monopolies. Instead, Thiel is interested in companies that come up with products that are so excellent that people will pay extra to have them.