🔖 Summary in 3 Sentences
A good take on the past, present, and future. It talks about how great businesses like Facebook, Google, Apple made it. Great perspective on competition and monopoly.
🧑🏻 Who Should Read It?
Anyone who wants to challenge their mind with a radical perspective of business and economy.
🔑 My 3 Key Takeaways
Competition vs monopoly.
In 2012, the average airfare each way was $178, the airlines made only 37 cents per passenger trip. Compare them to Google, which create less value but captures far more. Google brought in $50 billion in 2012 (versus $160 billion for the airlines), but it kept 21% of those revenues as profits – more than 100 times the airline industry's profit margin that year. Google makes so much money that it's now worth three times more than every U.S. airline combined.
In a perfect competition market, all the competitors want to have a share of the market, dropping their price in order to chase after the last bit of the market share. In the end, there's no profit remained. That's the perfect example of why an airlines ticket is so cheap, it's almost the same as bus fare. When you build a business, you should aim to achieve a monopoly in your market. In that way, you can capture the profits and build a better business. Differentiate, don't compete.
Last mover advantage.
It's much better to be the last mover – that is, to make the last great development in a specific market and enjoy years or even decades of monopoly profits.
Many people heard about the "first-mover advantage": when you're the first entrant to a market and capture the significant market share from the start. But what's good if someone comes along and unseats you. So it's better for you to be the last mover, who come in last but achieve the last great development in that market, and make sure no one will be able to surpass you. It's best to start small and make sure you take up a big portion of your niche market. Then scale to adjacent markets as you go. Build your moat.
Nerds vs salesmen.
The U.S. advertising industry collects annual revenues of $150 billion and employs more than 600,000 people. At $450 billion annually, the U.S. sales industry is even bigger. When they hear that 3.2 million Americans work in sales, seasoned executives will suspect the number is low, but engineers may sigh in bewilderment. What could that many salespeople possibly be doing?
I started as a nerd. Writing code in a dark room, day and night, and believes that my product will sell itself. But when I started my own company and starting to talk to potential customers, I come to a realization that sales and marketing are equally important. Without a good product, your customer never sticks. But without good sales and marketing, your product doesn't even have the chance to reach the hand of your customer.
💭 Afterthought
Peter Thiel and his founding team at Paypal are really extraordinary. The founder of Linkedin, Reid Hoffman is one of them. Elon Musk, the CEO of Tesla and SpaceX is also one of them. YouTube, Yelp, Palantir are all the products and companies created or founded after they sell Paypal to eBay. Their thought process is cool, and this book gives us a peek into their brilliant mind.
🛍 How to Buy?
I bought this book on Shopee for RM19.99. You can click here to buy this book.
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