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How to raise a successful business – Inspired by ‘Zero to One

How to raise a successful business

Do you know 95% of start-ups fail in the first 5 years of their launch? Reason – Old Concept, Poor Strategies and No Concrete plans. The question arises – how to raise a successful business?

“Almost everything worthwhile carries with it some sort of risk, whether it’s starting a new business, whether it’s leaving home, whether it’s getting married, or whether it’s flying in space.” – Chris Hadfield, Astronaut

Every start-up begins with a dream of growing into a successful and profitable business. One may say that a Great business needs drive and passion. It’s true but partially as there are few tricks that one must follow to be in that 5% who become a successful businessman.

In 2014, Peter Thielwrote a book ‘Zero to One’ in which he discussed many unconventional ideas and guided people about how to plan a start-up. He insisted on creating something new, instead of making an existing product better.

Here are a few important business lessons to learn from ‘Zero to One’:

  1. Offer something unique

In general, people see business as a competition and focus on outperforming their rivals. However, according to Peter Thiel creating ultra-successful businesses like PayPal and Facebook is all about avoiding competition and creating natural monopolies.

A company can create a monopoly in 2 ways: One by solving a unique problem, for example – For the first time, Airbnb allowed people to rent out extra rooms in the home. The other one is by doing something exceptionally well so that nobody can replace you, for example – the search engine Google which is irreplaceable.

New start-ups thus need to work on the uniqueness of the business, instead of serving old things in new packaging. Get a new idea, serve something unique to society and witness your business grow into a successful one.

  • Monopolize through technology, network, scale or branding

According to Thiel companies can create a monopoly in four ways.

  1. Proprietary Technology – According to Thiel a small improvement in a product will not make it, one must offer something 10 times better to monopolise the product. We can take the example of Tesla who has mastered engineering so well that its components are used in vehicles by many big companies. Other examples include Amazon, Paypal, Airbnb  
  1. Network effects – Network helps in reaching the product to maximum people and if a large group of people are using it your product achieves a monopoly. Facebook, Instagram, Uber, Twitter are few very good examples of the Network effect.
  1. Economies of Scale – An established company can easily reduce the cost of products without affecting the profit margin. Other companies cannot compete with large established companies as it will affect them cost-wise. One good example of this is Apps developing software companies.
  1. Branding – Claim monopoly by creating a strong brand as only your company can use it. Few strong examples of branding are Apple, Elon musk, Gucci etc.
  • Sell first

Thiel suggested that before starting a start-up we must think about how we will get people to use our product. Take the example of PayPal that adopted an expensive strategy to get the users. It gave PayPal essential dominance in the market.

One must keep critical points of promotion and distribution in plans for the start-up.

  • Begin with Small venture and concrete plans

Start-ups should focus on solving problems of a group of people who are however overlooked. It should be started aiming at a small market. Once you create a monopoly, you can expand your success to a larger business. This we can learn from the examples of Facebook, PayPal, Tesla where they started targeting a small group of customers and then expanded their business to larger markets and today they are among the most successful businesses.

  • Go from 0 to 1 – Make distinct plans

“Of course, it’s easier to copy a model than to make something new. 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” – Peter Thiel

Start-ups must learn that going from 1 to n is copying and modifying an existing product, going from 0 to 1 is creating something new that can provide monopoly. Start-ups being new can embrace the risk and can gift the world with something new and improvised. Google is a very good example of going from 0 to 1.

  • First movers – Fast movers

Start-ups should always work upon ideas that are new and presented first time to the world. First movers swiftly grab the market due to their innovative ideas. One important factor that works miraculously in the success of start-ups is timing. The right timing to launch a business when the market needs it greatly is equally important. Certainly, First movers should also be the Fast movers to get a hold on the market.

  • Look for Secrets

Those start-ups that work on the secrets for which the market is still not aware get easy success. These secrets are overlooked demands of the customers which were missed. It always reveals great business ideas.

These are few important lessons to learn from the book –‘Zero to One – Notes on start-ups, or how to build the future’. Reading this book is recommended to get a wider view of the tips to start a new business.

Let’s quickly summarize the lessons learnt by asking few questions that one should ask before planning a new start-up:

Create Monopoly in a startup
Create Monopoly in a startup

  1. Do you think your business can create a monopoly?
  2. Do you think your product is better than others?
  3. Do you think your business can sustain itself in the market?
  4. Have you planned about scaling up your business?
  5. Is this the right time to launch the desired business?
  6. Does your business idea carry some secret that is yet not revealed in the market?

If the answers to these questions is ‘Yes’, then go ahead and conquer the market.


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