Extremely discouraged after reading Zero to One
I’m building a startup. I won’t self promote but it’s in the sales intelligence/SaaS business (like Apollo or ZoomInfo but for a special niche and for smaller companies).
The thing is, after reading Zero to One by Peter Thiel, (which is one of the best books I’ve ever read) I don’t even know if it’s a good idea. I feel like I will live for a constant fight of competing my profits away and I’m doing something that’s already been done so many times.
However, I also stop and think about how a lot of these monopolies he mentions aren’t really that monopolistic and 99% of cloud-tech companies can be copied tech-wise (Uber, Airbnb, Google, a lot of these companies he mentions have tons of competition). So I keep going in circles thinking how true these things he says are and question them a lot…How can we really attempt to value how good our ideas are for competing in the real world and bringing us profits?
The central idea in Thiel’s Zero to One is that founders should build products in spaces–often niche space–where they can win monopolies. That’s a great idea in theory. If you can avoid competition, why not? As in many other startup books, however, this concept is a generalization with limited validity across the extraordinarily varied innovation landscape and time.
There are scores of examples of companies such as Slack, Calendly, and Canva being started in hugely congested spaces (business messaging, calendaring, and graphic design) with dominant incumbents. And spaces where there isn’t much competition, become competitive nearly instantly once an early leader demonstrates that an opportunity exists.
You can win significant market share in a crowded market if you create a product that is truly phenomenal for some population of the market.
Sometimes, it does make sense to focus initially on a very limited task or niche market, but it does not guarantee success; nor does the converse guarantee failure.
Just look at the project management platform market or CRM markets. New, innovative products are constantly being built and are winning huge market shares. Why does one group love Notion while another loves Monday, and yet another loves Jira/Confluence? Because of the nuances of their user experience and functionality. Each fits different use cases better than the others and, thus, different segments of the market.
At the end of the day, I really believe that it comes down to what Steve Jobs calls “craftsmanship.” If you can build a clearly superior product–not marginally better–you can win a substantial slice of the market.