How to turn a small business into a huge company one day?

Peter Theil is one of the five founders of Pay-Pal, a well-known online financial services provider. Peter Theil founded PayPal in 1997, along with Elon Musk and three others. They turned PayPal into a multi-billion dollar company from scratch. But he has an interesting story of this formula coming to us.

A few years ago, Peter gave a lecture on business at Stanford University in the United States. In the lecture, he talked about a few principles to start a new business and turn it into a billion-dollar company. These principles were recorded in detail in a notebook by a student named Blake Masters.

People were so successful by following that note that his reputation began to spread around. Upon learning this news, Peter Blake, in collaboration with the Masters, enriched the note and published a book called Zero to One. His purpose was to benefit people from all over the world with his knowledge.

Since you are reading this article, you are also going to be one of those people. – So let’s get started.

Policy 01: Go from ‘0’ to ‘1’

When people used horses for transportation, if you brought people better horses than conventional horses or traded in horse-drawn carriages, it would be 1 to N (N is an assumed value that falls within 1. Straight.) In words, nothing unique)

But if you were to bring people a brand new vehicle at that time (let’s say you invented the car) – then that improvement would be called going from 0 to 1 – that is, zero to one.

If you want to achieve unique success, you must go from 0 to 1, called “Vertical Progress” – you have to do something that no one has done before.

But instead, if you continue to do business with new changes to something that already exists, that success will never be unique. You may have some success with this type of business, but it will never be something like Google, Apple, or Microsoft. And this process, called “Horizontal Progress” – reduces your chances of success.

The big memories of the business world happen all at once. The next Bill Gates to come to earth will not build an operating system; The next Zuckerberg will not make social media; The next Larry Page won’t make a search engine like Google, the next Steve Jobs won’t make the world’s first buttonless smartphone. He might design a smartphone that doesn’t even need to be held in hand.

This means that those who will lead the next generation of the business world will develop something new. If someone came up with a better search engine than Google, he would not be able to come close to the edge of Larry Page’s success and fame today.

You’ve probably heard of the digital cryptocurrency Bitcoin. The current market value of a bitcoin is more than 6,000. But many new coins cannot get close to the price of bitcoin even with much more advanced technology and facilities. The only reason for this is that Bitcoin has come to the market first.

If someone copies the successes or wants to succeed by improving their ideas a little more, then maybe somewhat successful, but it will never be at the level of these legends. They have all gone from 0 to 1 already. That means they have already made ‘1’, and now if anyone starts with 1, they can’t do more than ‘N.’ So try something new – it’s more likely to succeed. But one thing to keep in mind is that no matter what you do, it will work for people.

Policy 02: Avoid competition

 In the book Zero to One, Peter says that competition in business works like poison. According to him, capitalism and competition are opposite to each other.

The first will help you gain business, and the second will hurt your business. The more competition there is for your product or service in the market, the lower your income. This is the situation of all small and big businesses.

Take, for example, two different types of business: airlines and search engines.

We all know that airlines make a lot of money every year. But a 2012 study found that airlines earned a total of 160 billion, but their revenue per passenger was ৭ 0.36.

Google, on the other hand, made 50 billion that year. With open eyes, Google’s profit figures are one-third that of the airline. But keep in mind, Google has earned this money as a single company. Contrary to the revenue earned per passenger by all the airlines, Google’s profit per customer was 100 times higher!

This is because the airlines were often forced to lower their ticket prices to compete with each other. Google, on the other hand, was one hundred alone.

Google’s profits are still three times higher than the combined profits of all American airlines.

When it comes to Microsoft, they are the first to launch image-based or visual operating systems. The fact that we work by clicking on icons and buttons with the mouse is unimaginable before Windows.

If you start a non-competitive market with your new product, you will be the best in that market for the first few days. As long as competitors enter the market, you will go a long way, and you will have such an acceptance among the people. Competitors will spend a lot of time and money to get to your level.

Policy 03: Start by targeting a specific buyer class

You may have heard the saying many times, “If you want to eat at once, you can’t eat anything.” – It may seem insignificant, but it is 100% true.

Amazon.com is a website where you can buy almost all kinds of products in the world. Many other companies are currently offering this service, and some companies like Jack Mar Alibaba.com are doing much better. But according to policy 2, Amazon started this business first, so no one has been able to surpass it yet. The founder of this Amazon is Jeff Bezos but is currently the richest man in the world.

Almost everything is now available on Amazon. But at first, Amazon went into business targeting a very small consumer group or buyer class. That market was the book market, and the target buyer was the people who read the book.

Before the advent of Amazon, books were only available in bookstores, making it very difficult for readers to find the book. Not all books are available in all stores. And the publishers of the book could not make much profit. Amazon saved time and money by building a bridge between publishers and readers. It was Amazon’s rise from 0 to 1. They started working with a whole new idea.

But the idea of ​​selling all the products online, not just books, was on Amazon founder Jeff Bezos from the very beginning. But he waited for his power to increase. Even at first, Amazon’s service was limited to just one city. Jeff understandably brought Amazon to its present stage little by little.

Following the book’s success, Amazon gradually began selling small products online, such as CDs and DVDs. And now if you want you can buy a car from there!

Now let’s talk about Peter Theil, the author of the book Zero to One. Peter and his partners have contributed to the success of today’s online payment system. They were the first to invent PayPal and make online payments so easy.

But at first, they did not try to bring people from all over the world into their service. Their first target market was ebey.com users. eBay is an online auction site. Here old or new products are traded through auctions. Before Paypal, eBay users used to transact by check. Instead of waiting for two or four days to get their money back from the hassle of running to the bank, the money started flowing from one person to another in minutes and seconds. And that’s how Pay-Pal captured the entire market for eBay users.

After the success of eBay, PayPal attracted the attention of ordinary users. The number of employees in their organization and the ability to provide services went to a bigger market as soon as they reached that stage. But if they had entered such a large market initially, they might not have had such great success today.

This is what new entrepreneurs learn from here. No matter what new business you do, grow your business a little bit by understanding your situation. No matter how big your dream or plan, look at yourself first. Try to understand how much you can cover now. Keep up the good work as much as you can now. Gradually increase the scope of business as capital and capacity increase.

Summary

Find a small problem in a small market or consumer group that no one is coming up with right now. That means

1.  Here’s your chance to do something new;
2.  There is no competition here;
3.  The market is small, so that you can build your business little by little.

Bring a nice solution to the problem, see gradually you can get your hands on a bigger case.

Appendix

Not just Pay-Pal, but many big companies are ruling today’s business world using the zero-to-one formula and speaking of Amazon. Peter just beautifully illustrates the formula used by almost all successful entrepreneurs in his book. And the name of the book? – “Zero to One.”