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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
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WHENEVER I INTERVIEW someone for a job, I like to ask this question: “What important truth do very few people agree with you on? “A good answer takes the following form: “Most people believe in x, but the truth is the opposite of x.” I’ll give my own answer later in this chapter.”
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The entrepreneurs who stuck with Silicon Valley learned four big lessons from the dot-com crash that still guide business thinking today: 1. Make incremental advances 2. Stay lean and flexible” 3. Improve on the competition 4. Focus on product, not sales
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The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.
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Tolstoy opens Anna Karenina by observing: “All happy families are alike; each unhappy family is unhappy in its own way.” Business is the opposite. All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.
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If you focus on near-term growth above all else, you miss the most important question you should be asking: will this business still be around a decade from now? Numbers alone won’t tell you the answer; instead you must think critically about the qualitative characteristics of your business.
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Paradoxically, then, network effects businesses must start with especially small markets. Facebook started with just Harvard students—Mark Zuckerberg’s first product was designed to get all his classmates signed up, not to attract all people of Earth.
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“The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors.”
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Sequencing markets correctly is underrated, and it takes discipline to expand gradually. The most successful companies make the core progression—to first dominate a specific niche and then scale to adjacent markets — a part of their founding narrative.
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Don’t disrupt: avoid competition as much as possible.
You Are Not a Lottery Ticket
Peter Thiel argues that success is not purely based on luck but on deliberate planning and bold vision.
He contrasts indeterminate thinking—where people hedge bets and wait for luck—with determinate thinking, where entrepreneurs shape the future with clear goals.
Thiel emphasizes that true innovators don’t rely on randomness but create their own success through strategic, focused action.