This blog by Blake Masters publishes essay versions of Peter Thiel's CS183: Startup class lectures from Stanford University. Peter Thiel was the co-founder and CEO of PayPal and is now a managing partner of Founders Fund. As of 2014, Mr. Thiel was ranked #4 on Forbes Midas List at $2.2 billion and holds a B.A. in Philosophy and a J.D. from Stanford. As noted in the title, the lecture notes were transcribed and compiled by a student of the class (Blake Masters who also holds a J.D. from Stanford). I think these notes will serve as the foundation of an upcoming book written by Peter Thiel with Blake Masters entitled "Zero to One - Notes on Startups, or How to Build the Future" due out on September 16th, 2014. I plan on downloading this book to my Kindle when it comes out as I thoroughly enjoyed the notes Mr. Masters posted. Here are my own abbreviated notes from having read through the entire course:
- The title 0 to 1 comes from Peter Thiel's definition of technology development which is going from nothing to something, whereas 1 to n is essentially globalization (or driving down the marginal cost through volume: copying n times). Mr. Thiel's primary thesis is that progress will come from intensive 0 to 1 technological solutions. This line of reasoning culminates in Mr. Thiel's business credo of "What valuable company is nobody building?". (class 1)
- Startups should register as a Delaware C corporation (class 6)
- A heuristic at Founders Fund is that a CEO of a startup should not be paid more than $150K/year. Most of the CEO's compensation should come in the form of equity. (class 6)
- Equity for employees (non C-suite) should be vested over time: the standard is over 4 years: "with 25% vesting at a 1 year cliff, and then with 1/48th vesting each month for the 3 years after that." Equity for the founders should similarly vest over time with 20-25% vested as credit for work up to the first round of financing (class 6)
- I found class 8 "The Pitch" the most informative:
- Pitch early in the day when people are fully awake and easier to engage
- Make propositions simple: problem + solution = money
- The CEO's job is pitching
- The pitch should be a story (not a formal ritualized pitch)
and should be more showing and less telling - Do not ask for an NDA from a VC but ask for one from job candidates
- The team is important (must answer why you?)
- Have a reasonable and thoughtful business plan/model even though it will certainly be a total work of fiction
- Have a clear ask (how much, what for, burn rate, valuation, etc...)
- When the deal closes immediately put out a press release and put the VCs on website
- Immediately starting thinking about next round and next VC
- Salespeople are required since products do not in fact sell by themselves (class 9)
- Software needs to be the heart of the company which comes from Marc Andreesen's thesis "software is eating the world" (class 10)
- Choose your enemies well because soon you'll become just like them (class 12)
- A single energy source typically dominates at any given time: wood, coal and perhaps soon natural gas (class 12)
- China will become old before it becomes rich and its GDP growth and energy consumption are locked in 1:1 with no new improvements (class 12)
- Global cleantech is ~420 GW and total global power generation is 15 000 GW (class 12)
- Mr. Thiel is very bullish on Thorium fission nuclear reactors: non-weaponizable and costs about 1/10 of other nuclear forms (class 12)
- "If you want advice, ask for money. If you want money, ask for advice" -- Peter Thiel (class 14)
- Chief Operating Officer is code for the #1 replacement candidate for CEO (class 18)
"There is perhaps no specific time that is necessarily right to start your company or start your life. But some times and some moments seem more auspicious than others. Now is such a moment. If we don’t take charge and usher in the future—if you don’t take charge of your life—there is the sense that no one else will.
So go find a frontier and go for it. Choose to do something important and different. Don’t be deterred by notions of luck, impossibility, or futility. Use your power to shape your own life and go and do new things. "Addendum: here is another review of the same class notes from Business Insider. Chapter 2 of the book can be seen here.
