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Zero to 1 (Success is never by chance Shallow men believe in luck,…

- - - - Proprietary Technology
        
        Rule of thumb (10x better)
        
        Creating something entirely new (value is theoretically infinite)
        
        radically improve an existing solution (can be in the form of efficiency, variety, etc)
        
        superior integrated design
      - Branding
        
        consumer experience
        
        omnipresent advertising campaigns
        -price positioning
        
        have to be supported by an underlying substance as no tech company can be built on branding alone
      - Network Effects
        
        start off small business market
      - EOS
        
        Software startups can enjoy especially dramatic economies of scale because the marginal cost of producing another copy of the product is close to zero
        
        potential to scale
        
        service business not advisable
    - - Monopolies lie to protect themselves from being audited, scrutinised and attacked.
        
        want their profits to remain unmolested,
        
        hence conceal their monopoly by overstate power of their non-existent competition.
        
        Google (portraying themselves as a tech company mean that it owns less than 0.24% of the market, c/w stating it is a search engine where it owns 68%)
        
        framing their market as the union of several large markets
        
        Being different, they don't have to worry about competing, allowing them to have wider latitude to care about its workers, products, impacts on the wider world, to take ethics seriously without jeopardising its own existence.
        
        Perfect Competitors always understate the scale of competition
        
        done by narrowing the market that they dominate
        
        exaggerate their distinction by defining their market as the intersection of various smaller markets
        
        so focused on daily margins that it can't possibly plan for a long-term future (only way to transcend the daily brute struggle for survival- monopoly profits)
      - Why PC is valued ?
        Stemmed from educational system where
        
        students who don't learnt best by sitting still at a desk are made to feel somehow inferior, while children who excel on conventional measures like tests and assignments end up defining their identities of this weirdly contrived academic parallel reality.
      - Rivalry also causes companies to overemphasise old opportunities and slavishly copy what has worked in the past
        
        Hence, it is wiser to less sensitive to social cues, such that you're less likely to do the same things as everyone else around you.
        
        To understand competition as a sign of destructive force instead of being a sign of value
  - - - Common question to ask
        
        Ownership: Who are the legal owners
        
        Possession: Who runs the daily operations
        
        Control: Who formally govern the company's affair
        
        Companies typically have issue between ownership & possession
        
        startups are small such that founder have both, most conflict rise between ownership and control (i.e. between founders and investors)
      - Board Member
        
        Should be small
        
        3 is ideal, not exceeding 5
        
        and chosen carefully to prevent being oppose
        
        easier to communicate , reach consensus and exercise effective oversight,
      - Founder
        
        Finding the right founder
        
        Beside Tech abilities and complementary skill sets, important that founders know each other well and work well together
        -Founders' compensation should be low
        
        high pay incentivises people to defend status quo along with salary, and won't work to solve problems and aggressively as there is no need too (there's a safety net)
        
        whereas, a cash-poor executive will focus on increasing the value of company as a whole
        
        Alternatively, can also draw the highest salary but at a modest amount to set an effective ceiling on cash compensation
      - Employees
        
        Either full-time or don't employ (except certain profession like accountants and lawyers)
        
        reason behind that they are fundamentally misaligned and be biased to claim value in the near term, not creating more in the future
        
        Any kind of cash incentives is likely to encourage short-term thinking and value grabbing (applies both to cash compensation and bonus)
        
        Equity is a good measure for employees to create value in the future.
        
        anyone who prefers owning equity would reveal a preference for the long term and commitment to increase your company's value in the future
        
        a great way to keep everyone broadly aligned
        
        have to be careful (not everyone should be given the same stake)
        
        keep their ownership stake anonymous to avoid conflict