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Billionaire author Peter Thiel knows what it takes to succeed. Though sales people don’t have a romantic reputation and are oftentimes dismissed by tech savvy or operations people, Peter knows just how important sales are to the success of any company. He dedicates an entire section of his book to the topic.
As a business owner it is important to have a plan to sell your product. If your startups rely on cold calling and that’s it you need to be thinking about how to create a flow that leverages the power of the internet. Having a lead acquisition strategy in place is what will make your endeavor scalable. Acquiring customers is hard and you need to address this problem by developing a systematic solution. For more on this read the book Predictable Revenue.
Advertising agencies are thriving out there because companies need help in advertising and selling products. Also, it is not just about direct response advertising. Marketing can also be done to enable subtle impressions that the sales team can leverage to drive sales later. Effective sales and marketing should work on the subtleties of the subconscious and conscious mind. When you run an effective sales and marketing campaign it firmly establishes your brand in the minds of the consumers.
With this insight you feel more confident about spending money on sales, marketing and advertising. You begin to understand this will eventually bring people to buy from you. For more on a systematic team approach to sales and marketing read the book The Ultimate Sales Machine.
This point is nailed home with a funny anecdote about how salesmen are hated but how they are important to both the business and the customer.
Be A Leader Not A Competitor
One of the best parts of the book is when Thiel makes his case about avoiding competition. Using restaurants as an example of this. He shares the specific way in which San Francisco restaurants cannibalize each other and are in a race to the bottom with lower and lower prices.
Thiel urges the reader to establish monopolistic dominance and his whole position is to avoid competition. Tweak your business or change your model to be a monopoly and not a competitor. Create a value that no other company is creating and then build on strategies to capture that value. Keep innovating and think long-term. For more on standing out like this you can read Blue Ocean Strategy, Sticky Branding, and Switch.
Peter Thiel co-founded PayPal in 1999. There was even a merger with Elon Musk who was his competitor. He was witness to the dot-com boom and bust. Peter references all this in the book and shares his experience and valuable lessons learned.
One of which was to be a passionate visionary. Mark Zuckerberg had an offer for $1 billion to sell Facebook. He called a board meeting and said, "Okay guys, this meeting is just a formality. It should not take us more than 10 minutes. We are obviously not selling here."
Having a well guided vision for your company and where you want to go is very powerful. Changes and momentum take place over time and without great vision, it is not going to happen. Something Jim Collins dubbed a BHAG, Big Hairy Audacious Goal, in his book Built To Last.
Peter discusses the Power Law. Exponential equations describe unequal distributions. A small handful of companies radically outperform all others. If you focus on diversification instead of single-minded pursuit of the very few companies that can become overwhelmingly valuable, you'll miss those rare companies in the first place.
In statistics a typical distribution is represented using a bell curve. The power law shows an exponential arc. This massive return potential leads to his rule for venture capital investment: “only invest in companies that have the potential to return the value of the entire fund.” For more on this read the book Lost And Founder.
From outside the venture capital world, this means invest in yourself. Choose a career or a business that has a monopolistic future scope and is defensible 10 or 20 years from now. The reason that tech companies like Uber or Twitter have valuations that are so high is because 80% of the valuation is coming from revenues 10 years into the future. This is only done if you have a defensible position.
Every startup should start with a very small market. Always err on the side of starting small. The reason is simple. It is easier to dominate a small market than a large one. That is extremely sound advice from a man who has achieved a great deal in his life. He makes perfect examples out of Amazon and eBay on how to start small and then scale up, how to grow onward from a single small niche. One might also read the book The One Thing to learn the scalability and power in focusing one one most important thing.
Perhaps the most reflective part of the book is the questions that Peter developed to test the validity of an idea. These are 7 Questions every business must answer to be successful, gain clarity about goals and have worthwhile vision:
The Engineering Question: Can you create breakthrough technology instead of incremental improvements?
The Timing Question: Is now the right time to start your particular business?
The Monopoly Question: Are you starting with a big share of a small market?
The People Question: Do you have the right team?
The Distribution Question: Do you have a way to not just create but deliver your product?
The Durability Question: Will your market position be defensible 10 and 20 years into the future?
The Secret Question: Have you identified a unique opportunity that others don't see?
Peter Thiel is a technology entrepreneur and venture capitalist. He started, invested in, and advised some very important technology companies in the past 30 years, earning himself a fortune in the process. As of mid-2020, he had an estimated net worth of $2.3 billion.
In 1998, he merged with founders Elon Musk and Max Levchin to become the Paypal you know of today. He was the first outside investor in Facebook, offering up $500,000 angel investment in 2004. Various other profitable investments in the likes of Airbnb, Stripe, etc, contributed to his wealth.
In September 2014, Thiel published Zero to One which became a New York Times bestseller.
Thiel is also one of the few notable Silicon Valley members to support Donald Trump's presidential run, was considered to chair Trump's intelligence advisory board, and sat on the executive committee of Trump's transition team.
Blake Masters was a student at Stanford Law School in 2012 when his detailed notes on Peter's class "Computer Science 183: Startup" became an internet sensation and the foundation of this book. He is President of The Thiel Foundation and Chief Operating Officer of Thiel Capital.
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