Notes On Startup – Four big Lessons from dot-com Crash

It was the period between 1995 to 2000 where investors across the world started investing on internet based startups hoping that all the internet based companies will make money, however by 1999 dot-com bubble started to collapse which is typically referred as dot-com crash.

image credit zero to one book
image credit zero to one book

Entrepreneurs who stuck in Silicon Valley between 1995 to 2000, learned four big lessons from the dot com crash. That still guide business thinking today.

  1. Make incremental advances
    • Grand vision inflated the bubble, so they should not be indulged. Anyone who claims to be able to do something great is suspect and anyone who wants to change the world should be more humble, small, incremental steps are the only safe path forward
  2. Stay lean and flexible
    • All companies must lean which is code for “unplanned”, You should not know what your business will do, planning is arrogant and inflexible.
  3. Improve on the competition
    • Don’t try to create a new market prematurely. The only way to know you have a real business is to start with an already existing customer, so you should build your company by improving on recognisable products already offered by successful competitors.
  4. Focus on Product not Sales
    • If your product requires advertising or sales people to sell it, its not good enough. Technology is primarily about product development, not distribution. Bubble era advertising was obviously wasteful, so the only sustainable growth is viral growth.

Try things out “Iterate”, Treat Entrepreneurship as agnostic experimentation

These lessons have become dogma in startup world; those who would ignore them are presumed to invite the justified doom visited upon technology in the great crash of zero and yet the opposite principle are probably more correct.

  1. It is better to risk boldness than triviality (lack of seriousness or importance)
  2. A bad plan is better than no plan
  3. Competitive market destroy profits
  4. Sales matters just as much as product

Reference: Book Zero To One By Peter Thiel

Continue reading – Startup Thinking – Perfect Competition vs Monopoly

Notes On Startup – Startup Thinking – 1 to n And 0 to 1 progress

Globalisation is horizontal progress 1 to n, technology is vertical progress 0 to 1. Going back to the history, from 1815 to 1914, period of both rapid technological development & rapid globalisation, between first world war & Kissinger’s trip to China, to re-open relation with China in 1971, there was rapid technological development but not much globalisation. Since 1971 we have seen rapid globalisation

Globalisation brings decade ahead more convergence and more sameness, what developed nations have done in past, now many poorer nations doing the same and caching up thats what we call globalisation

Technology matters not just globalisation

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But the truth is technology matters, without technological change if China doubles its power production over next two decades, it will also doubles its air pollution. If every one in India, hundreds of thousands of households were to live the way Amaricans live using only today’s tools the result would be environmentally catastrophic.

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Spreading old ways to create wealth around the world will result in devastation, not richer. In a world of scarce resource, globalisation without new technology is unsustainable.

Today the challenge is to both imagine and create the new technologies that can make the 21st centuary more peaceful and prosperous than the 20th.

Startup thinking

It is hard to develop new things in big organisations and it is harder to do it by yourselves

Bureaucratic hierarchies move slowly and entrenched interests shy away from risk. At the other extreme, a lone genius might create a classic work of art but he could never create an entire industry.

Startups operate on the principal that you need to work with other people to get stuff done, but you also need to stay small, positively defined, a startup is the largest group of people you can convince of a plan to build a different future.

New Thinking

New companies most important strength is new thinking, even more important than nimbleness, small size affords space to think

Reference: Book Zero To One By Peter Thiel

Continue Reading – Startup Thinking – Four big Lessons

Notes On Startup – Building Something New and Innovative

The Next Bill Gates will not build an operating system, The next Larry Page will not build a search engine, The next Mark Zukerberg will not build Social network.

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If you are copying these guys, you aren’t learning from them

Doing what we already know how to do take the world from 1 to n


Every time we create something new, we go from 0 to 1, the act of creation is singular and the result is something fresh and strange

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The Best Paths are New and Untried

Horizontal or extensive progress means copying things that work going from 1 to n, horizontal progress is easy to imagine because we already know what it looks like.

Vertical or intensive progress means doing new things going from 0 to 1, vertical progress is harder to imagine because it requires doing something nobody else has even done.

Reference: Book Zero To One By Peter Thiel

Continue Reading – Startup thinking – 0 to 1 progress