{"id":10499,"date":"2020-07-07T10:11:00","date_gmt":"2020-07-07T14:11:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=10499"},"modified":"2020-07-10T22:01:29","modified_gmt":"2020-07-11T02:01:29","slug":"startup-tips-zero-to-one","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/","title":{"rendered":"Peter Thiel&#8217;s 3 Startup Tips for New Tech Founders"},"content":{"rendered":"\n<p>Are you looking for the best startup tips? Or are you looking to launch a startup and don&#8217;t know where to begin?<\/p>\n\n\n\n<p>This collection of business startup tips can help you think like a founder, and dive into the logistics of your business, like hiring people. These startup tips serve as a great guide and jumping-off point for your startup launch.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Startup Tip #1: Lessons<\/strong> From the Past<\/h2>\n\n\n\n<p><strong>Startups consisting of a few people with a common mission are the source of most new technology. <\/strong>But many tech startups today are hobbled by four erroneous lessons drawn from the 1990s <a href=\"https:\/\/www.shortform.com\/blog\/dotcom-bubble-zero-to-one\/\">dot-com bubble<\/a> and crash. This offers several <a href=\"https:\/\/www.shortform.com\/blog\/qualities-of-a-good-business\/\">great business<\/a> startup tips. <\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Make incremental advances: <\/strong>Be wary of big visions that drive bubbles. Move forward with small, incremental steps.<\/li><li><strong>Stay lean and flexible: <\/strong>To stay lean and flexible, don\u2019t tie your hands with planning. Instead, try things and iterate or build on the ones that work.<\/li><li><strong>Build on the competition: <\/strong>Don\u2019t try to create new markets. Build your business by improving on a product people are already buying from someone else.<\/li><li><strong><a href=\"https:\/\/www.shortform.com\/blog\/product-focus\/\">Focus on product<\/a>, not sales: <\/strong>If you have a good product, it should spread virally without a need for advertising.&nbsp;<\/li><\/ol>\n\n\n\n<p>Tech startups treat these lessons as sacrosanct, but they actually undermine success, especially big innovations. The opposite of each lesson is more accurate:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>It\u2019s better to be bold than inconsequential.<\/li><li>A bad plan is better than none.<\/li><li>Don\u2019t compete: competition destroys profits.<\/li><li>Sales strategy matters as much as product.<\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Monopolies and Competition<\/strong><\/h3>\n\n\n\n<p>The idea of a monopoly can be threatening. But considering monopolies is another one of Thiel&#8217;s business startup tips. <strong>Monopolies are good for society.<\/strong> While it may seem counterintuitive, they can be more ethical, treat workers with greater consideration, and create more value than companies locked in competition do.<\/p>\n\n\n\n<p>Competitors are caught up in a daily <a href=\"https:\/\/www.shortform.com\/blog\/struggle-to-survive\/\">struggle for survival<\/a>. For instance, with their low margins, restaurants have to do everything possible to minimize expenses\u2014which can include paying minimum wage to employees and putting family members to work for nothing. In survival mode, money is everything.&nbsp;<\/p>\n\n\n\n<p>In contrast, <strong>in a monopoly where profits are assured, there\u2019s room to consider other things besides money<\/strong>. For instance, lacking intense competition, Google can give consideration to its workers, its products, and its impact on society.&nbsp;<\/p>\n\n\n\n<p>Monopolies\u2019 bad reputation comes from sometimes earning outsized profits at the expense of society. Certain monopolies corner the market on something that\u2019s needed and jack up the price; customers have no choice but to pay it. This works for the owners in a world where nothing changes, like in the game of Monopoly, where you control as much real estate as you can, but you can\u2019t create new real estate.<\/p>\n\n\n\n<p>In contrast, <strong>creative monopolies do good and drive social progress<\/strong> because they operate in a different environment, a dynamic one. Instead of controlling all the options like Monopoly real estate, they create new options. They expand consumers\u2019 choices by creating new categories of things. By adding value, creative monopolies <a href=\"https:\/\/www.shortform.com\/blog\/how-to-make-society-better\/\">make society better<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Other Factors in Building a Monopoly<\/strong><\/h3>\n\n\n\n<p>There are five additional considerations in <a href=\"https:\/\/www.shortform.com\/blog\/building-a-monopoly-zero-to-one\/\">building a monopoly<\/a>:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Discovering a secret<\/strong>: Creating a great business that no one else can compete with starts with discovering and building on a secret. It can be an untapped opportunity or a different way of looking at a problem. For example, Airbnb recognized and connected a supply of unoccupied lodging with travelers\u2019 demand for affordable and unique accommodations. The founders of Uber and Lyft built billion-dollar businesses by connecting people who needed rides with drivers willing to provide them. Believing in secrets (untapped potential) and looking for them enabled these entrepreneurs to see an opportunity no one else noticed.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Expanding your market<\/strong>: How you choose and expand your market are critical to your success. Start with a small market because it will be easier to dominate than a large one. Once you\u2019ve dominated a small market, slowly expand into related markets that are a bit wider. This was Amazon\u2019s approach. Jeff Bezos\u2019s long-term goal was to dominate online retail but he chose to start by selling only one thing\u2014books. After a successful start with books, the company began selling CDs, videos, and software and gradually expanded to other categories until it became the dominant online retailer.<\/li><li><strong>Disrupting<\/strong>: When entrepreneurs think of their companies as disrupting a market, they\u2019re focusing on things as they currently are, rather than coming from a new perspective. It\u2019s far more important to focus on the new product you\u2019re creating than on how old companies will react to it. If disrupting existing companies is part of your company\u2019s identity, then your company isn\u2019t new and isn\u2019t likely to become a monopoly.<\/li><li><strong>Being a \u2018last mover\u2019: <\/strong>The \u201cfirst mover advantage\u201d means getting into a new market first and taking a substantial share of the market before anyone else gets there. But moving first is a tactic, not a goal.&#8221; Your goal is to generate cash flows for the future. You do this by starting with a small slice of the market (being the first mover) and gradually expanding, dominating each new slice until you own the ultimate market for your product. You want to be <strong>the last mover\u2014the one who makes the last spectacular improvement in a market that ensures years of monopoly profits.<\/strong><\/li><li><strong>Understanding the <a href=\"https:\/\/www.shortform.com\/blog\/power-law-distribution\/\">power law<\/a>: <\/strong><a href=\"https:\/\/www.shortform.com\/blog\/power-law-zero-to-one\/\">The power law<\/a> describes a common phenomenon in which small changes can have disproportionate results. Startups should operate according to the power law. A <a href=\"https:\/\/www.shortform.com\/blog\/narrow-focus\/\">narrow focus<\/a> on the right thing will produce the greatest results:<ul><li>One market will bring the greatest success.<\/li><li>One distribution strategy will outperform all others.<\/li><li>Some moments will count more than others.<\/li><li>What\u2019s most important probably won\u2019t be obvious.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Startup Tip #2: Basics, Key Decisions, Building a Team<\/strong><\/h2>\n\n\n\n<p>When starting a company, it\u2019s important to choose leaders who have the right technical knowledge and whose skills are complementary. Equally important, however, is how well the founders know each other and work together. You also need a structure and clearly defined roles so everyone is aligned to move the organization forward. Having clear organization and a great team are common tips for startups. <\/p>\n\n\n\n<p>For effective alignment, you must make three decisions:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Ownership: Who will own the company\u2019s equity<\/strong>. Ownership is typically divided among founders, employees, and investors.<\/li><li><strong>Possession: Who will run the company day-to-day<\/strong>. It may be a founder\/CEO or manager and employees.<\/li><li><strong>Control: Who will govern the company.<\/strong> A board of directors (usually consisting of founders and investors) maintains control.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Compensation<\/strong><\/h3>\n\n\n\n<p><strong>A CEO of a venture-funded startup shouldn\u2019t be paid more than $150,000 a year<\/strong>. High pay (more than $300,000) encourages him to protect his salary by defending the status quo and minimizing problems rather than exposing and fixing them.<\/p>\n\n\n\n<p>Other advantages of low CEO pay are that it:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Encourages the executive to focus on increasing the value of the company<\/strong>.<\/li><li><strong>Motivates employees to work harder<\/strong>. By working for lower pay, an executive demonstrates his commitment to the company and its mission. Employees will follow his example.<\/li><\/ul>\n\n\n\n<p>By the same token, over-paying employees encourages them to focus on what the company is doing in the present instead of thinking about how to increase the company\u2019s value in the future. Cash bonuses also encourage short-term thinking. Offering equity or part ownership of the company shifts the focus to the future.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Recruiting<\/strong><\/h3>\n\n\n\n<p>Most tips for startups include taking time to recruit the best employees. The first few employees in a startup might be attracted by exciting roles or equity. But beyond your first round of hires,<strong> you must be able to articulate to the 20th candidate why she should want to join your company.<\/strong><\/p>\n\n\n\n<p>Your answers need to be specific to your company. They should address:<\/p>\n\n\n\n<p>1) <strong>Your mission<\/strong>: Explain what makes your mission unique and compelling\u2014what\u2019s the important thing you\u2019re doing that no one else is doing?&nbsp;<\/p>\n\n\n\n<p>2) <strong>Your team<\/strong>: Show potential employees that the people on your team are the kind of people they want to work with. Show recruits how your company is a unique match for them.<\/p>\n\n\n\n<p>Don\u2019t cite your perks\u2014you don\u2019t want people working for you who can be convinced to do so by things like laundry pickup because that\u2019s an indication of superficiality. Your unique mission is what should count.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Startup Tip #3: Success Comes From Planning<\/strong><\/h2>\n\n\n\n<p>Planning ahead is one of the most important startup tips. Businesspeople debate whether success comes from luck or design. Some popular writers and leaders emphasize luck and downplay the importance of design or planning in contributing to success. This makes many people think planning\u2014trying to shape the future\u2014is pointless.<\/p>\n\n\n\n<p>For instance, author Malcolm Gladwell writes in <em>Outliers<\/em> that success results from \u201clucky breaks and arbitrary advantages.\u201d Warren Buffett notes that he was lucky to be born with certain qualities. Jeff Bezos and Bill Gates both claim luck played a role in their success.<\/p>\n\n\n\n<p>It\u2019s possible luck could play a role in an individual success, but luck isn\u2019t sufficient to explain how the same person\u2014for instance, Elon Musk, Jack Dorsey, Steve Jobs\u2014could achieve a series of extraordinary, multibillion-dollar successes.<\/p>\n\n\n\n<p>When Dorsey, the <a href=\"https:\/\/www.shortform.com\/blog\/creators-of-twitter\/\">founder of Twitter<\/a> and Square, tweeted in 2013 that \u201cSuccess is never an accident,\u201d most of the responses were dismissive, citing white male privilege over intelligent planning as the biggest factor in success. However, while connections, wealth, and experience\u2014and luck\u2014can be factors, in recent years, we\u2019ve tended to ignore or overlook <a href=\"https:\/\/www.shortform.com\/blog\/why-planning-is-important\/\">the importance of planning<\/a>.<\/p>\n\n\n\n<p>In the past, people thought differently. From the Renaissance and the Enlightenment into the 20th century, people believed you made your own luck by working hard. Ralph Waldo Emmerson wrote, \u201cShallow men <a href=\"https:\/\/www.shortform.com\/blog\/believing-in-luck\/\">believe in luck<\/a>, believe in circumstances \u2026 strong men believe in cause and effect.\u201d&nbsp;<\/p>\n\n\n\n<p>Today, <strong>whether you think of the future as determined by chance or design affects how you act in the present and whether you ultimately succeed<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>A Checklist for Success<\/strong><\/h3>\n\n\n\n<p>While you&#8217;re searching for tips for startups, you should complete this checklist. In summary, a startup won\u2019t succeed without a business plan that addresses each of the following questions. If your answers are weak, your company will fail\u2014however, with a solid answer for each, you&#8217;ll be on your way to having a great business.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Engineering<\/strong>: Is your technology a significant advance or only incremental improvement?<\/li><li><strong>Timing<\/strong>: Is this the right time to sell this technology?<\/li><li><strong>Monopoly<\/strong>: Are you targeting a big share of a small market?<\/li><li><strong>People<\/strong>: Do you have the <a href=\"https:\/\/www.shortform.com\/blog\/hiring-the-right-people\/\">right people<\/a> on your team?<\/li><li><strong>Distribution<\/strong>: Do you have a plan to <a href=\"https:\/\/www.shortform.com\/blog\/how-to-sell-a-product\/\">sell your product<\/a>?<\/li><li><strong>Durability<\/strong>: Will you dominate your market in the next 10 to 20 years?<\/li><li><strong>Secret<\/strong>: Have you identified a unique opportunity overlooked by everyone else?<\/li><\/ul>\n\n\n\n<p>These startup tips can help you begin your startup journey. Use these startup tips to build your business plan and work toward your launch.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you looking for the best startup tips? Or are you looking to launch a startup and don&#8217;t know where to begin? This collection of business startup tips can help you think like a founder, and dive into the logistics of your business, like hiring people. These startup tips serve as a great guide and jumping-off point for your startup launch.<\/p>\n","protected":false},"author":5,"featured_media":10511,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,79],"tags":[97],"class_list":["post-10499","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-entrepreneurship","tag-zero-to-one","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Peter Thiel&#039;s 3 Startup Tips for New Tech Founders - Shortform Books<\/title>\n<meta name=\"description\" content=\"Looking for the best startup tips? Look no more. 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Zero to One offers great startup tips and advice from building your team to thinking like a tech founder.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/\" \/>\n<meta property=\"og:site_name\" content=\"Shortform Books\" \/>\n<meta property=\"article:published_time\" content=\"2020-07-07T14:11:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-07-11T02:01:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/s3.amazonaws.com\/wordpress.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/startup-advice-zerotoone-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Carrie Cabral\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Carrie Cabral\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/\"},\"author\":{\"name\":\"Carrie Cabral\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/2ababb7c63a94ff5d2190f71dc417d56\"},\"headline\":\"Peter Thiel&#8217;s 3 Startup Tips for New Tech Founders\",\"datePublished\":\"2020-07-07T14:11:00+00:00\",\"dateModified\":\"2020-07-11T02:01:29+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/\"},\"wordCount\":1851,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/startup-advice-zerotoone-scaled.jpg\",\"keywords\":[\"Zero to One\"],\"articleSection\":[\"Business\",\"Entrepreneurship\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/\",\"name\":\"Peter Thiel's 3 Startup Tips for New Tech Founders - Shortform Books\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/startup-tips-zero-to-one\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2020\/07\/startup-advice-zerotoone-scaled.jpg\",\"datePublished\":\"2020-07-07T14:11:00+00:00\",\"dateModified\":\"2020-07-11T02:01:29+00:00\",\"description\":\"Looking for the best startup tips? 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