From 0 to 1: unlocking the secrets of business and the future

Chapter 3 Preface: The Business Wisdom of "Daoshengyi"
Today, businesses compete fiercely head-to-head.The market is like a limited pie. When you can't bravely slice bigger than others, you will start to fall behind, and you will even be out in the end.As a result, companies began to compete for speed, execution, and who can copy and reproduce trendy products or business models faster and better.Despite such efforts, most companies still cannot escape the fate of living on meager profits or even being eliminated due to losses.

In Peter Thiel's view, this is the fate of "from 1 to n".Enterprises walking on this road are fighting in the Red Sea. The survival rule they pursue is to take food from their competitors, and the way out is to be brave enough to be the first in the fierce competition.Peter Thiel believes that this kind of zero-sum game that only focuses on "there is" and is limited to the trade-offs is really not very clever.What he advocates is the wisdom of "from 0 to 1", or "from nothing", "Tao begets one".Through innovation, this brings more possibilities to human beings, creates new value, and makes the whole cake bigger.

In the middle of the 20th century, technology developed rapidly. In 1969 alone, two major events occurred: the landing of humans on the moon and the birth of the Internet.So everyone expects a lot of "from 0 to 1" to happen in this world, such as energy is so cheap that it doesn't need to be measured at all, you can go to the moon for vacation, and so on.However, these expectations fell through. According to Peter Thiel, the only major improvements were the development of computers and communications.He often sighs: We used to want flying cars, but now we get 140 characters (new media such as Twitter are limited to 140 characters).

From 0 to 1, or from scratch, means that enterprises must be good at creating and innovating, and form barriers through technical patents, network effects, economies of scale, brands, etc., so as to achieve a qualitative vertical level leap, thus opening up a unique It belongs to its own blue ocean market and becomes the only one in this market. Such a monopoly is enough for the company to enjoy huge profits.

Even for the entire commercial society, this model has opened up the territory of non-zero-sum games, focusing on creating new value and making the market pie bigger. This is the ultimate way of salvation for commercial society and even human society.In contrast, from 1 to n is just copying, cannot create new value, and may even become a copycat model that is plagiarized everywhere.

"From 0 to 1" versus "From 1 to n"
from 0 to 1 from 1 to n
innovation copy
Qualitative change
vertical horizontal
blue sea red sea
Monopolistic Competition
the only first
non-zero and zero-sum
Huge profits and small profits
Taking this as a dimension to examine contemporary enterprises, we can divide the business realm of enterprises into three levels.

The first level: Enterprises only manufacture products that meet market demand. As long as there are prototypes, the industrial assembly line can make a large number of products copied and produced.But products have a life cycle, the market is saturated, and profit margins are limited. This is a typical process from 1 to n. It is only a process of quantitative change, and it is only a process for companies to pursue profitability.

The second level: the enterprise has created a good organizational gene, so it can keep evolving with the times and realize vertical inheritance. The best product of the enterprise is the enterprise itself.For example, IBM, when it was founded in the early days, its main business was commercial typewriters, and the products of the past and today are completely irrelevant.However, since its establishment more than a hundred years ago, the cultural and institutional genes established by IBM have been continuously passed on, which has promoted IBM's continuous evolution and continued to create business brilliance.However, such vertical inheritance is still within the enterprise, and still belongs to the process from 1 to n.

The third level of realm: Enterprises create social genes or ideological genes, which can cross the boundaries of enterprises, affect the entire industry and even society, and achieve horizontal inheritance.For example, Apple, its success far exceeds the scope of simple products such as computers or mobile phones, and its influence is not limited to Apple.It can even be said that our era is deeply branded by Apple, which means that from 0 to 1, the genes created by enterprises have affected social culture and concepts, and even changed the social process. This is a qualitative change.

The importance of going from 0 to 1 is not necessarily valued by all masters of thought.For example, the recent very popular "Capital in the 21st Century", in my opinion, Thomas Piketty's exposition is very wonderful, but there is a shortcoming in it, that is, he ignores the significance of technological innovation in economic development .Economic development is not a zero-sum game. It does not mean that if some players in the market develop faster than GDP, other players will definitely suffer.It would be biased to discuss fairness without considering the role of technological innovation.Thomas Piketty's theory can be established in the world from 1 to n, but he ignores the new possibilities and new values ​​created by humans from 0 to 1.

This is also similar to James Carse's distinction between finite and infinite games. A finite game is played within a boundary. It is a zero-sum game with a definite beginning and an end. Players just compete under established rules. Winners, if someone wins, someone must lose.But infinite games play with boundaries, which is a non-zero-sum game with no definite beginning and end. Players can continue to join and new values ​​are constantly created, so the game can continue continuously.

It is worth noting that this book "From 0 to 1" is by no means an academic discussion or a debate between masters of thought. Since its publication, its influence has quickly surpassed the investment circle, and it has ranked among the top on the Amazon book bestseller list in the United States.When I had breakfast with Peter Thiel in Silicon Valley and chatted about this book, he also expressed his high hopes for this book, looking forward to truly promoting the world through the sharing of personal experience and experience, including of course the current flood of copycats. China has more "from 0 to 1".

The success of "From 0 to 1" not only lies in Peter Thiel's in-depth analysis of the "road" that is crucial for contemporary companies to break through the Red Sea of ​​competition, but also in the fact that this book condenses the essence of his experienced wisdom and experience .Peter Thiel is the well-known godfather of the "PayPal gang" and a person who has sat on both sides of the negotiating table (he has done entrepreneurial financing and investors). He is Facebook's first Outside investors, this investment alone allowed him to earn thousands of times the return.

The reason why it was dubbed the "gangster" is because PayPal, a payment company with a deep "from 0 to 1" gene, has produced many business leaders and spawned many famous companies in the business world.Such as Reid Hoffman (Reid Hoffman), the co-founder of LinkedIn, Steve Chen, the co-founder of YouTube, a new innovation leader in Silicon Valley after Jobs, Space Exploration Technology (Space X), Tesla's The head Elon Musk and so on.Tang Bin and I returned from Silicon Valley to establish YeePay because we were deeply influenced by the "PayPal gangster" from 0 to 1 gene. In 2013, I participated in the production of CCTV's large-scale documentary "Internet Age", and also specially interviewed Elon Musk, Reed Hoffman and Chen Shijun. They are the models of "from 0 to 1" in the history of the Internet.

This book "From 0 to 1" is to outline the replicable genes "from 0 to 1", so its significance is not only to remind us of the importance of "from 0 to 1", but more importantly to share the With the operable methods and feasible paths that I have personally practiced, I believe that the advent of "From 0 to 1" in China will surely help many innovators and creators in China who have dreams and are not willing to be reconciled to the copycat model and look forward to grasping tomorrow by creating new value. Entrepreneurs and entrepreneurs bring new inspiration and motivation to move forward.

Yu Chen, Co-Founder of YeePay
(End of this chapter)